Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereo, have been complied with, namely:

North British and Mercantile Insurance Company Bill [Lords].

Ordered, That the Bill be read a Second time.

Cardiff Corporation Bill [Lords],

Liverpool Copper Wharf Company, Limited (Delivery Warrants), Bill [Lords],

Read a Second time, and committed.

Manchester Ship Canal Bill [Lords] (by Order),

Second Reading deferred till Thursday.

Oral Answers to Questions — PORTUGUESE WEST AFRICA.

1, 2 and 3. Lieut.-Colonel Sir S. HOARE: asked the Under-Secretary of State for Foreign Affairs (1) whether His Majesty's Government has withdrawn from the arrangements to which the Portuguese Government consented in 1913 whereby British consuls were specially appointed to report upon labour conditions in Portuguese West Africa;
(2) if he is in a position to state the number of Angola serviçaes sent to and
repatriated from the Portuguese islands of San Thomé and Principe during the years 1917, 1918 and 1919;
(3) what is the death-rate amongst the children and the adults, respectively, upon the Portuguese plantations of San Thomé and Principe?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The number of Angolan serviçaes sent to San Thomé in 1917 was 1918, repatriated 2,553; in 1918, 937, repatriated 1,484; in 1919 (10 months), 5,178, repatriated 1,176.
Island of Principe (January to September, 1917), 408, repatriated 43. No further figures are available for this island.
Precise figures of the death-rate in the islands are lacking, but, according to a rough estimate received from His Majesty's Consul-General at Loanda in August, 1918, the death-rate for all classes of labourers on San Thomé had decreased to 4½ per cent. per annum in 1917 and that of Angolan natives to 3½ per cent. No figures for the Island of Principe are available. Owing to the great demands on the personnel of the consular service, it is not possible to detail one of His Majesty's consular officers to carry on inquiries into this subject, and it will therefore not be possible to furnish further official information.

Sir S. HOARE: Is the hon. Gentleman certain that the death-rate statistics are correct? I understand there has been some miscalculation. Will he make further inquiry?

Mr. HARMSWORTH: Yes, I think the figures are only to be taken as approximate. I will make further inquiry.

Oral Answers to Questions — DIPLOMATIC SERVICE (AMBASSADORS).

4. Brigadier - General SURTEES: asked the Under-Secretary of State for Foreign Affairs how many of the British Ambassadors' posts are now held by persons other than professional diplomats; and whether, seeing that the appointment of non-professional persons to such posts is calculated to retard promotion in the Diplomatic Service and thereby dis-
courage those who spend their lives abroad in the belief that they are qualifying for the higher ranks of their profession, he will give the matter his consideration.

Mr. HARMSWORTH: The posts of Ambassador at present held by Ambassadors who had not previously been members of the Diplomatic Service are those of Paris, Washington, and Berlin. While the posts of Ambassador are, as a general rule, filled by professional diplomatists, the choice of an Ambassador for any particular country cannot be restricted when special political considerations or circumstances have to be taken into account.

Mr. C. PALMER: Is it not the general feeling in this country that we should discard professional Ambassadors, and have men fitted to go to great countries.

Mr. HARMSWORTH: The hon. Member is just as well able to estimate public opinion as I am.

Oral Answers to Questions — RUSSIA.

BRITISH PRISONERS.

6. Lieut. - Commander KENWORTHY: asked the Under-Secretary of State for Foreign Affairs how many British subjects, approximately, remain in Russia as prisoners; how many of these are in prison for offences against common law; how many were captured on the various fighting fronts; and what progress has been made in the negotiations for their exchange or release?

Mr. HARMSWORTH: I am, I regret, unable to say how many prisoners still remain in Russia, as His Majesty's Government have been unable to obtain any definite information on this subject from the Soviet Government. The large majority of British subjects in Russia have now been repatriated, and it is possible that some of those now remaining there do not desire to return to the United Kingdom. According to my most recent information there are still 12 British subjects in prison at Moscow, Petrograd and Vologda: and besides these there are certain civilians who are reported to be in arrest at Baku. His Majesty's Government have been unable to procure any information from the Soviet Government as to the reason for
the imprisonment of these persons, and there is reason to suppose that it is not due to any offence against common law. As regards the third part of the question, 11 officers and 7 other ranks are prisoners in Siberia, having been captured in December and January last; the majority of these were members of the British Railway Mission; the prisoners taken at Baku cannot be considered as having been captured on a fighting front. Two officers were captured in South Russia in December, but His Majesty's Government have not hitherto been able to obtain any information concerning them. There are also others who have at various times been reported missing but who are not known to have been prisoners. As regards the fourth part of the question, the House has already been informed that it has been made clear to the Soviet Trade Delegation that until the release of all British prisoners in Russia takes place, no trade will be permitted between Russia and the United Kingdom. His Majesty's Government are still awaiting the reply of the Soviet Government.

Lieut.-Commander KENWORTHY: I thank the hon. Gentleman for his reply. May I ask him if it is not the fact that the Soviet Government have agreed on principle to the release of these prisoners?

Mr. HARMSWORTH: I would rather not make any reference to the negotiations which are going on.

Lieut.-Colonel J. WARD: Can the hon. Gentleman state the exact position of the 11 officers captured in Siberia?

Mr. HARMSWORTH: I understand that these officers desire to be repatriated by way of Vladivostock, and decline to go through Moscow.

Lieut.-Colonel WARD: I should think so.

Commander Viscount CURZON: Has the Government any later information with regard to the naval prisoners at Baku?

Mr. HARMSWORTH: Yes, we understand that they have been removed to a villa outside Baku. I have no further information.

Viscount CURZON: Is it not a fact that they are on a rocky island in the Caspian?

Mr. HARMSWORTH: That is not my information.

Mr. PEMBERTON BILLING: Are the Government prepared to lay down a time limit for the release of the prisoners, and to announce that, unless they are released within that time, there will be an entire breakdown to the negotiations.

Lieut. - Commander KENWORTHY: Why cannot the hon. Gentleman, in order to relieve the anxiety of the relatives of these people, admit that the Soviet Government have agreed in principle to release the whole of the prisoners?

Mr. HARMSWORTH: That is precisely one of the points of negotiation between His Majesty's Government and the Soviet Government.

KIEFF.

31. Mr. ROBERT RICHARDSON: asked the Secretary of State fur War how many British officers were present at the Polish evacuation of Kieff in order to give information to the British Government?

The SECRETARY of STATE for WAR (Mr. Churchill): I am informed that two British officers were present.

GENERAL GOLOVIN (INTERVIEWS).

Mr. CLYNES (by Private Notice): asked the Secretary of State for War whether he proposes to take any steps with regard to the very serious statements made in the public Press dealing with his action and policy in relation to Russia; and whether he is prepared to make a full statement on the subject?

Mr. CHURCHILL: My right hon. Friend gave me notice of this question yesterday. For some reason or other he did not put the question. If he had done so, I should have given him the answer I give him now. I have nothing to add to the statement made by my right hon. Friend the Leader of the House yesterday, in answer to a question across the Floor of the House.

Mr. CLYNES: May I, therefore, ask the Leader of the House whether we can have an early opportunity of discussing the matter referred to in the question?

Mr. BONAR LAW (Leader of the House): I would like to know what it is that it is desired to discuss before I can give any answer. In any case, it would be very difficult to find time before the Recess.

At the end of Questions—

Mr. CLYNES: In view of the terms of the reply, I beg to ask leave to move the Adjournment of the House in order to call attention to a definite matter of urgent public importance, namely, the publication of evidence to the effect that secret arrangements, tending to mislead Parliament and the people regarding British military commitments, are made in the War Office, in co-operation with the military representatives of other countries.

Mr. SPEAKER: I do not think I can take that as a matter of urgency. It relates to matters which took place some time ago, and there is nothing urgent about it. Should the right hon. Gentleman desire to raise a discussion upon it, there are proper means of doing so, and before the end of the month there will be several occasions upon which the matter could be raised. I could not accept the Adjournment Motion.

Mr. CLYNES: While it is true that these events are perhaps twelve months old, they have been revealed to us only in the last few days.

Mr. SPEAKER: The revelation does not create a matter of urgency.

Colonel WEDGWOOD: May I point out to you, very respectfully, that at the present moment our relations with Poland are exactly similar to what a year ago our relations were with Koltchak's Government, and that what happened then may very well be happening now both in connection with Poland and in connection with Wrangel's Government in the Crimea, and that, if what was done then was wrong, it is of urgent importance that we should stop such a thing happening again in connection with other powers, which may involve us in war and may again be deceiving the people and the Government of this country?

Mr. SPEAKER: The proposition which the hon. and gallant Gentleman makes is too remote. If the hon. and gallant Member has any suggestion that at the present
time the Secretary of State for War is carrying on any negotiations with the Polish Government or with General Wrangel, which are unknown to the Government and contrary to the policy of the Government—if the hon. and gallant Member will produce any evidence of that character, that raises an entirely different matter and puts the question in a different light.

Colonel WEDGWOOD: Is not that to be pre-supposed from the fact that he was doing exactly that a year ago, contrary to what anyone in this country would have supposed possible?

Mr. SPEAKER: The hon. and gallant Gentleman pre-supposes that General Golovin's statements in the interview are correct. I understand that that presupposition is denied.

Mr. N. MACLEAN: Would it not be advisable, in the interests of the Secretary of State himself, to make a statement of his side of the case so that we could know whether General Golovin's case is correct or not?

Mr. PALMER: May I ask whether it would make the Motion of the right hon. Gentleman the Member for Platting (Mr. Clynes) in order if we were to add these words "and to call attention to the national danger of his continued presence at the War Office and the urgent need for the immediate removal of the right hon. Gentleman from the position of Secretary of State for War"?

Mr. SPEAKER: That is not a proper method by which to move a vote of censure on a Minister. There is a proper method of doing so.

Captain W. BENN: May I ask the Leader of the House whether he will consider the advisability of publishing a White Paper showing which of General Golovin's statements are disputed by the Secretary of State for War?

Mr. BONAR LAW: No. There may be something in all this, but, I have not been able to see it. I have no reason whatever to suppose that my right hon. Friend (Mr. Churchill) has been doing anything behind the backs of his colleagues.

Lieut. - Commander KENWORTHY: May I ask the Leader of the House whether he has satisfied himself that there
are no other similar negotiations going on in other directions at the present time?

Mr. SPEAKER: I am afraid the interrogatories are getting rather discursive.

Colonel WEDGWOOD: Are we to understand that it will be impossible to move the Adjournment in connection with affairs in Russia at the present time, and that this prevents free discussion in this House of grave actions of this misleading Government?

Mr. SPEAKER: The hon. and gallant Gentleman must only suppose what he will find in my ruling in the OFFICIAL REPORT to-morrow.

Mr. CHURCHILL: I hope I may be permitted to make a personal statement. I have not personally the slightest desire to avoid any Debate.

HON. MEMBERS: Why avoid it?

Mr. SPEAKER: I take responsibility for the decision, which is according to the rules and procedure of the House.

EGYPT (MILNER COMMISSION).

7. Mr. WATERSON: asked the Secretary of State for Foreign Affairs whether the Milner Commission as such has ceased to exist; whether it is now authorised to act as representative of the Government to negotiate with the Egyptian delegation as representative of Egypt; whether the independence of Egypt and the Soudan has been recognised by the Government; and if the negotiations are for the purpose of ascertaining what guarantees Egypt can give to safeguard British interests?

Mr. HARMSWORTH: The Milner Mission has in no sense ceased to exist, and their present negotiations with Zaghloul Pasha and his followers do not go beyond their original instructions. These were to consult with representatives of all shades of opinion with a view to working out a scheme for the future government of Egypt which, while safeguarding the interests of Europeans, should satisfy so far as possible the aspirations of Egyptians. In the meantime there is no change in the political status of Egypt or the Soudan.

Mr. L'ESTRANGE MALONE: When may we expect a declaration from the Government on their Egyptian policy?

Mr. HARMSWORTH: We have first to receive and consider the Milner Report.

SECRET SERVICE.

11. Mr. MALONE: asked the Under-Secretary of State for Foreign Affairs whether, on the occasion of British secret service agents abroad coming into possession of private documents and letters due to police raids on the houses of private individuals or through other channels, it is usual to permit the information contained in these documents or letters to be communicated to private individuals not connected with His Majesty's service?

Mr. HARMSWORTH: The action suggested by the hon. Member is certainly not usual, but I do not think it is desirable to discuss in this House action attributed to persons alleged to be British secret service agents. If the hon. Member is alluding to any particular incident and will give me details of it privately, I will readily cause inquiries to be made.

Mr. RAPER: Are not both the hon. Gentlemen to whom the question is addressed and the hon. and gallant Member who put it both aware that the documents evidently referred to in the question were not obtained through the secret service?

Lieut. - Commander KENWORTHY: What has the hon. Member for Islington (Mr. Raper) to do with British agents abroad?

Oral Answers to Questions — GERMANY.

SOAP (CONFISCATION).

12. Mr. RAPER: asked the Parliamentary Secretary to the Overseas Trade Department whether his attention has been drawn to the fact that 50 tons of Watson's Matchless Cleanser Soap, value £5,000, which was shipped in error by the British Rhineland Navigation and Transport Company per ss. "Jupiter" on 21st April, after the shippers had given instructions not to ship on account of an import licence being required after 18th April, have been confiscated by the German authorities in Cologne; whether he is aware that, despite repeated applications having been made to the authorities in Berlin and Cologne for the
release of the soap, either to form part of a delivery for which a licence has been granted or for permission to send the soap back to England, the owner is now told that such permission cannot be given and that the soap is irrevocably confiscated; and whether he will request the German authorities to return this soap to its British owners?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridge-man): I have been asked to reply. My attention has not previously been called to this case. I should be glad if the hon. Member would furnish me with the name and address of the owner of the consignment. in order that the matter may be dealt with.

COUNTER-REVOLUTIONARY MOVEMENT.

50. Colonel WEDGWOOD: asked the Prime Minister whether his attention has been called to statements that a Royalist counter-revolutionary movement is on foot to form Bavaria, Tyrol, and Salzburg into a South German kingdom; that munitions are being smuggled into the Tyrol from Bavaria for the purpose of arming the peasants; that the governor of Tyrol is tolerating the arming of the peasants by the counter-revolutionaries; that the headquarters of the movement are in the Hotel Andreas Hofer, in Innsbruck; and whether he will call for a Report from the representative of His Majesty's Government?

Mr. HARMSWORTH: I should be glad to be informed what authority there is for the statements to which my hon. and gallant Friend refers, in order that I may decide whether any useful purpose would be served in calling for a report from His Majesty's representative in Vienna.

Colonel WEDGWOOD: I will send the hon. Gentleman particulars.

EAST PRUSSIA (GERMAN TROOPS).

58. Mr. JOHN GUEST: asked the Lord Privy Seal whether His Majesty's Government have information as to the concentration of German troops in East Prussia; whether these troops are to be used to assist the Poles; whether General Neil Malcolm, head of the British military mission at Berlin, has recently gone to Warsaw; what is the purpose of his visit; and whether he is accompanied by German military representatives?

Mr. BONAR LAW: The answer of the first part of the question is, except for unconfirmed rumours in the German Press, in the negative. The second part does not therefore arise. The answer to the third part is in the affirmative, and to the fourth that General Malcolm's visit was undertaken in the ordinary course for the purpose of liaison with the British Military Attaché in Poland. As regards the last part, the War Office have no reason to believe that General Malcolm was accompanied by German military representatives.

Lieut.-Commander KENWORTHY: May we take it that it is not intended to invite the Germans to assist Poland against Russia?

Mr. BONAR LAW: I have heard of no such intention.

Colonel WEDGWOOD: Can the right hon. Gentleman make inquiries whether a German military representative did go to Warsaw with the British representative?

Mr. BONAR LAW: I do not see any necessity for it. It is extremely improbable. He may have travelled by the same train: but that is not our business.

Colonel WEDGWOOD: Does the right hon. Gentleman not see the extreme impropriety of a German military officer going to Warsaw as a colleague with a British military officer?

Mr. BONAR LAW: I do not believe there is the slightest reason to suppose that that is so.

Oral Answers to Questions — MUNITIONS.

CHILWELL ORDNANCE DEPOT.

13. Mr. BETTERTON: asked the Secretary of State for War whether his attention has been called to the allegations which have been made regarding the depreciation and waste of stores at the Chilwell ordnance depôt; and whether he will make a full statement on the subject and inform the House what steps are being taken to preserve and to dispose of to advantage the accumulation of stores there collected?

14. Sir J. D. REES: asked the Secretary of State for War whether he will give a general explanation of the great accumulation of stores at Chilwell and of their disposal; and whether he is aware that
such stores are rapidly deteriorating in value while awaiting disposal?

Mr. CHURCHILL: It is proposed to use Chilwell in future as one of the chief depots for military stores. Meantime it has been used for the reception of material delivered after the Armistice under war contracts, or brought back from France. The latter material occupies a large proportion of the space. It has to be examined and classified as serviceable or requiring repair, which necessarily takes time. With regard to some classes of military material, it is only after this classification is complete that it can be known whether the items are to be retained or transferred to the Disposal Board for sale. Including surplus unused articles, which do not require examination, a proportion of the material at Chilwell has been placed in the hands of the Disposal Board—some of it as far back as September, 1919. It is not all, however, readily saleable. Investigation has been made and every care is being taken to preserve the stores which are under cover. It is impossible to accommodate everything in the existing sheds; and to build new ones for a temporary need would involve greater expense than any loss likely to be sustained by the articles which are for the time being uncovered. These consist principally of guns, gun-carriages, limbers, carts, galvanised barbed wire, and several hospital trains which have recently arrived and are having the fittings removed prior to being restored to civilian use. There is no foundation for the statement that excessive quantities of stores are to be retained, and the misapprehension has probably arisen from the fact that the articles for disposal are unavoidably stored together with those which are to be retained. I am impressing upon the Disposal Board the urgency of removing and selling the material which has been handed over to them. I am also giving directions to the Departments of the Quartermaster-General and the Master-General of the Ordnance which will ensure still larger quantities being declared surplus at an early date.

Mr. BILLING: Is it not a fact that there are a very large number of Bessonneau tents distributed about the various aerodromes of the country, which could be transferred to this depôt and used for protecting these goods and preventing them from deteriorating?

Sir J. D. REES: Is the right hon. Gentleman aware that residents in the Eastern Midlands were proud of this factory in its working days, and are proportionately critical of its dilapidated state at the present time; and will he continue to press the authorities, to whom he has already made representations, seeing that the factory at present affords an object-lesson and a focus of general criticism?

Mr. CHURCHILL: All these cases are very difficult. There are vast masses of stores, of which some have to be kept, some have to be disposed of, and all have to be sorted. If they continue in their present conditions they will, of course, deteriorate; but to take steps to give cover to all the stores would involve an expense far beyond what would be justified. Even when they are handed over to the Disposal Board, the difficulties of transportation and disposal are very great, and when they are sold there is the burden on the railway lines of removing them. In all these circumstances, the best possible must be done, and that, I believe, is being done.

Mr. WATERSON: Is the right hon. Gentleman aware that many hon. Members know this place perfectly well, and are totally dissatisfied with such a reply; and is he prepared to consider an inquiry into the matter?

Mr. CHURCHILL: No, Sir. I do not think an inquiry would help. I think the best thing is being done that is possible. If the hon. Member has a plan for dealing with the matter, and would care to put it on paper and send it to me, I should be glad.

Mr. BILLING: Will the right hon. Gentleman collect the Bessonneau tents to which I have referred, and which could easily be collected throughout the country and concentrated where these valuable stores are? Will he say "Yes" or "No?"

Mr. CHURCHILL: It is quite impossible to give an answer "Yes" or "No" to such a proposal.

Oral Answers to Questions — EX-SERVICE MEN.

POSTAL DRAFTS.

15. Mr. C. PALMER: asked the Secretary of State for War whether he is aware
that postal drafts for gratuities and back pay from the War Office to the residences of ex-soldiers are sometimes wrongly addressed and are frequently cashed by the recipients; that in such cases refuge is taken behind a clause in the Regimental Debts Act; and whether it would be possible to safeguard the payees by having the drafts crossed?

Sir A. WILLIAMSON (Parliamentary Secretary, War Office): I do not think the crossing of drafts would be welcomed generally. I should, however, be glad if the hon. Member would give me particulars of any of the cases to which he refers.

INCOME TAX.

68. Mr. SITCH: asked the Chancellor of the Exchequer whether an ex-service man who on his demobilisation was obliged to live with his wife and family in furnished lodgings owing to his inability to obtain a house is entitled to any rebate from income tax for the cost of storing his furniture; and, if not, whether he will consider the possibility of granting this concession?

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): Expenditure of the nature indicated would not normally be admissible as a deduction for Income Tax purposes, but the question would depend upon the facts of the particular case in which the allowance may have been claimed. If the hon. Member has any such case in mind and will communicate the full facts either to the Board of Inland Revenue or to me, enquiry shall be made into the matter and the result shall be communicated to him.

DECREES OF EJECTION, SALTCOATS.

84. Mr. MILLS: asked the Secretary for Scotland whether he is aware that a demobilised soldier named Patrick M`Ginlay, residing in Quay Street, Salt-coats, has had a decree ejection granted against him in the sheriff court to allow of his house being let to summer visitors at a much higher rent than he is able to pay; is he further aware that the above-named demobilised soldier is the holder of the Mons star, two 1914 rosettes with bars, and has also been decorated with the Military Medal; that M'Ginlay is at the present time paying 8s. a week rent for the single apartment which he occupies
with his 10 children; and whether any action will be taken to prevent this ejectment order being put into effect?

The SOLICITOR-GENERAL for SCOTLAND (Mr. C. D. Murray): I have made inquiry into this case and am informed that Mr. M'Ginlay, who has three children, occupied a furnished apartment from which he has had to remove in consequence of a decree of ejection. He obtained other accommodation which, I understand, he continues to occupy. Accordingly, the last part of the question does not arise.

85. Mr. HOGGE: asked the Secretary for Scotland whether Dugald Cameron, an ex-soldier, given land for food production in Glenorchy, on the Marquess of Breadalbane's estate, by the Board of Agriculture for Scotland, has been warned out by the Board as from Whitsunday last; whether proceedings for the ejection of this ex-soldier have been raised with the knowledge and concurrence of the Board of Agriculture by the Marquess of Breadalbane; whether the land which this ex-soldier wishes to retain forms part of the Blackmount deer forest, now enlarged to about 80,000 acres; whether a considerable extent of this area was formerly food-producing and occupied by sheep farmers; and whether he proposes to instruct the Board of Agriculture to project any scheme for settlement of soldiers on this area, and particularly in Glenorchy, so that this ex-service man is not thrown into prison by the State?

Mr. MURRAY: The answer to the first part of the question is in the affirmative. As regards the second part, the Board are aware of the proceedings for ejection, but they have no status to concur. As regards the third and fourth parts, the land forms part of Craig deer forest, as to the former use of which my right hon. Friend has no accurate information. As regards the last part of the question, the Board have considered the matter of proceeding with a scheme in this area, but in view of all the circumstances they have not deemed it desirable to do so. I may add that I am informed that Mr. Cameron declined an offer by the proprietor of the choice of one of three holdings on the estate.

Mr. HOGGE: Are the Scottish Office willing that an ex-soldier on the land
should go to prison as a result of this ejectment order?

Mr. MURRAY: My information is to the effect that the termination of the tenant's possession was due to the fact that the Board had ceased their powers of occupation under the Act.

Mr. HOGGE: Is the Scottish Office in that case going to do anything with regard to a settlement for soldiers?

Mr. MURRAY: I have told my hon. Friend that the matter has been carefully considered, but in view of the circumstances the Board could not proceed with the scheme.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

RE-EMPLOYED OFFICERS (GRATUITIES).

16. Colonel YATE: asked the Secretary of State for War for what reason or on what grounds the reassessment of their gratuities has been refused by him to officers re-employed during the War who had previously retired on gratuity, while the reassessment of their retired pay has been given by him to re-employed officers who had previously retired on retired pay?

Sir A. WILLIAMSON: This distinction is based on the difference between a continuing payment at the present day and a final settlement effected by the payment of a lump sum at some date in the past.

HAND-PROPELLED TRICYCLES.

88. Major COHEN: asked the Minister of Pensions what is the number of hand-propelled tricycles which have been supplied by the Ministry to disabled soldiers since 1914; whether there has been any other source of supply; and, if so, what is its title and how many tricycles has it supplied?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Major Tryon): This Department commenced the supply of hand-propelled tricycles in March, 1918, and the number supplied up to the 30th June was 1,549. Prior to March, 1918, 272 tricycles had been supplied by the Lord Kitchener National Memorial Fund. I understand that a small number has also been supplied from other charitable sources, but the figures are not available.

Oral Answers to Questions — BRITISH ARMY.

ARMY RESERVE.

17. Colonel YATE: asked the Secretary of State for War what progress has been made in the enlistment of the new Militia Force that is to form the reserve for the Regular Army?

Mr. CHURCHILL: Considerable progress has been made regarding the principles which it is proposed shall govern the organisation and conditions of service for the new Militia Force, but it is not anticipated that recruiting can commence for some time to come.

Colonel YATE: Can the right hon. Gentleman say why? Is no attempt being made to get any men at all?

Mr. CHURCHILL: I am doing the best I can to get reserves for the Territorial Army at the present time, and we are continuing recruiting for the Regular Army. We have these different claims competing in the recruiting market, and we have to deal with them in the order which is conducive to getting the best possible result.

Colonel YATE: Is it not necessary first of all to get reserves for the Regular Army?

Mr. CHURCHILL: If that were so, it would be an answer to the question which my hon. and gallant Friend has put.

20. Lieut.-Commander KENWORTHY: asked the Secretary of State for War whether it is proposed to enrol some 20,000 ex-soldiers as an Army Reserve; what are the reasons for this increase of His Majesty's Army; what is the estimated annual cost of this Reserve; and what will be the estimated annual cost when it is called to the colours?

40. Mr. RAFFAN: asked the Secretary of State for War what is the estimated cost, during the current year, of the addition of 20,000 men to the Army Reserve?

Mr. CHURCHILL: It is proposed to re-open Section "D" of the Army Reserve for the enlistment or re-engagement of 20,000 men. This is part of a scheme which was in contemplation when the Army Estimates were prepared, and provision was made for a Reserve rising to 140,000, the figure at which it stood before the War. The present step will only
bring the numbers up to 80,000, and a considerable saving will, therefore, accrue on the amount provided, in consequence of the delay in recruiting the full and authorised reserve. The cost is, at the rate of 1s. per man per day. In the event of mobilisation the cost of maintaining these men is not increased by reason of the fact that they have previously been in the Reserve.

Lieut. - Commander KENWORTHY: Are these 20,000 men not required for immediate mobilisation service, but only in Reserve in case of a general big war?

Mr. CHURCHILL: They are not required for any service, but we must endeavour to form a Reserve for the technical units.

Colonel YATE: Will the right hon. Gentleman consider the question of increasing the 20,000 to 40,000 or 50,000?

Mr. CHURCHILL: I am deeply sensible of the need and desirability of raising the reserves to the ordinary pre-War strength, but again I am considering the interests of the Territorial Army. I do not wish to prejudice these by going upon the recruiting market for them at the same time, so that they compete with one another. I think that, on the whole, surveying the situation, we can probably afford to delay still further the formation of our Regular Reserves, in order to give the Teritorial Army a fair start.

CADET CORPS.

18 and 19. Major HENNESSY: asked the Secretary of State for War (1) whether the War Office is prepared to grant to Secondary School Cadet Corps attending camp the same privileges as regards hospital treatment or allowances as are at present accorded to Junior Officers' Training Cadet Corps;
(2) whether, in the event of the British Red Cross Organisation being prepared to supply hospital treatment, under efficient conditions, to Secondary School Cadet Corps attending camp, the War Office will sanction the payment on behalf of the Cadets requiring to be admitted to hospital of the regulation hospital allowance of 3s. per case per day?

Sir A. WILLIAMSON: These Territorial Force Cadet Units are raised on the understanding that they should be financially self-supporting. It has recently
been decided to make a capitation grant from Army funds in aid of the expenses of the administration and training of these units, but it will not be possible to put them on the same footing as the Junior Officers' Training Corps, or to accept any liability beyond the capitation grant referred to above.

Colonel GREIG: Would it not be well to make it a condition of the grants that these corps will do their best to recruit for the Territorial Army in due course, from their members who have gone through the Cadet Corps?

Sir A. WILLIAMSON: I should like to have notice of that question

DESERTION (IRELAND).

Mr. SWAN: The following question stood on the Order Paper in the name of 
21. To ask the Secretary of State for War if he will state the number of desertions during the last six months from the Army now occupying Ireland, and the number for the corresponding six months of last year?

Mr. SWAN: I have been asked to postpone this question, but I should like to ask the right hon. Gentleman if he can suggest what would be a reasonable date on which I might put the question down?

Mr. CHURCHILL: Statistics are being obtained from Ireland, but they are not quite complete, and I cannot say when they will be.

EDUCATION CERTIFICATES.

23. Mr. LEONARD LYLE: asked the Secretary of State for War whether it was customary, whilst the Army School Department was under the administration of the Adjutant-General, to issue duplicate certificates of education in the event of the original documents being lost or destroyed through no fault of the intended recipient; whether this procedure has been abandoned now that the Education Department is under the administration of the Chief of the Imperial Staff; and, if so, whether he will give instructions that the issue of duplicate certificates shall be resumed in the cases mentioned.

Mr. CHURCHILL: Although it was customary in certain special cases to issue duplicate certificates of education in the event of original documents being lost
or destroyed, the Special Army Certificate which has been instituted by the Education Department under the administration of the Chief of the Imperial General Staff is accepted by the Universities and various other learned bodies as equivalent to Matriculation Examination. In view of the obligations which these arrangements entail to reduce the possibilities of malfeasance, it is considered that duplicate certificates cannot safely be issued. In order that no hardship may be inflicted careful record of all certificates issued is kept at the War Office, and the candidate or any responsible body or person interested will be furnished with a transcript of the record on application.

RECRUITS (EXAMINATIONS).

26. Mr. NEWBOULD: asked the Secretary of State for War whether the opinions expressed by recruits in their replies to questions on British Empire and citizenship in the examination for third-class certificates will be taken into account when deciding whether a certificate shall be granted or refused?

Mr. CHURCHILL: No, Sir; the knowledge of the subject possessed by the recruit will determine whether or not he passes.

Captain BENN: Will the curriculum showing what is meant by citizenship be laid upon the Table of the House, or in any way submitted to the opinion of the House?

Mr. CHURCHILL: That has nothing to do with this particular question. Of course it is in the power of the House to obtain any information that it desires.

Captain BENN: I am asking whether this new curriculum of Army education, defining what is meant by good citizenship, will be submitted to the opinion of the House of Commons?

Mr. CHURCHILL: There is no object in submitting it to the approval of the House of Commons unless the House especially desires it.

EDUCATIONAL CORPS.

27. Mr. KENYON: asked the Secretary of State for War whether it is proposed to place a soldier or an educationalist at the head of the Army Educational Corps?

Mr. CHURCHILL: The Army Educational Corps is under the Department of the Chief of the Imperial General Staff, which Department will administer the corps.

Major MACKENZIE WOOD: Will the education officers be competent?

Mr. CHURCHILL: They will be very carefully selected.

Major WOOD: Will it be necessary for them to, have any previous training in teaching?

Mr. CHURCHILL: I think that is a question of which I should have notice. It does not arise out of the question on the paper.

GENERAL SERVICE WAGONS, GLOUCESTER.

30. Sir J. BRUTON: asked the Secretary of State for War what was the total number of general service wagons delivered to Monk Meadow, Gloucester; what was the approximate cost of the wagons; how many of them have been used for the purposes for which they were ordered; and how many of them are still at Monk Meadow?

Sir A. WILLIAMSON: 5,434 general service wagons have been delivered to Monk Meadow, and their cost was approximately £565,000; 4,287 wagons have been used for the purpose for which they were ordered, and the remaining 1,147 are to be issued to the Dominions.

Sir J. BRUTON: When will the wagons be removed, as the site is required for the storage of timber?

Sir A. WILLIAMSON: I should like to have notice of that question.

WAR OFFICE (OFFICERS' CASUALTIES DEPARTMENT).

32. Major BIRCHALL: asked the Secretary of State for War what is the work now being done in M.S. 3 Cas. Department at the War Office; what the staff consist of; and what is the total amount of their salaries?

Mr. CHURCHILL: There are still a very large number of inquiries arising out of casualties to officers during the War, including the verification of casualties for various official purposes and questions regarding missing officers and prisoners of war. The branch referred to is also engaged on work connected with the issue
of the plaque and scroll to the next of kin of officers killed in the War; the preparation of records of war services of officers and generally in clearing up the aftermath of work arising out of the War. The staff consists of one retired officer, one permanent Civil Servant, three permanent ex-soldier clerks, and 12 ex-soldiers who were wounded in the War. The salaries of the staff amount to £24,160 a year. The work is gradually decreasing, and I anticipate that it will be possible to make commensurate reductions in the staff.

TETANUS.

34. Mr. ROBERT YOUNG: asked the Secretary of State for War what was the attack rate and death rate per 1,000 wounded men from tetanus in the South African War, the Russo-Japanese War, the Crimean War, and the Franco-Prussian War?

Mr. CHURCHILL: There were six cases of tetanus among other ranks wounded or injured in action during the South African War, or an attack rate of .28 per 1,000; and three deaths, or a death rate of .14 per 1,000. There were no cases of tetanus among officers. No statistics regarding tetanus are available in the War Office for the other wars mentioned.

TEMPORARY OFFICERS (STAFF DUTIES).

36. Mr. T. A. LEWIS: asked the Secretary of State for War whether any temporary officers are now being employed on staff duties; and, if so, whether their services can be dispensed with and their duties discharged by Regular officers?

Mr. CHURCHILL: A certain number of temporary officers are still employed on staff duties. They are being replaced as suitably qualified Regular officers become available.

IRISH SOLDIERS (MEMORIAL).

39. Mr. WILLIAM COOTE: asked the Secretary of State for War if he is aware that a circular has been issued under the patronage of His Royal Highness the Duke of Connaught and other distinguished military personages soliciting funds for the erection of a memorial to the men of Irish regiments who have fallen in the War; that this memorial is to take the form of completing and decorating a Roman Catholic chapel in the Roman Catholic Cathedral, London,
and erecting certain memorial tablets therein; is he aware that more than half the men who fell in these regiments were Protestants; and can he take steps to see that the memorial which is to be erected is not to take a sectarian form?

Mr. CHURCHILL: This appears to be a matter for the individual subscribers, and, in the circumstances, I see no ground for the War Office to intervene.

Mr. COOTE: Is the right hon. Gentleman aware that men in the highest positions in the British Army are engaged in propagating this circular, lending their influence to it, and appealing to the friends of Protestant soldiers in Ireland who have fallen, and will they be allowed to go on in their capacity as British soldiers in high office in the Army?

Mr. CHURCHILL: I think a campaign which is intended to raise a Catholic memorial to Catholic soldiers who died fighting for this country in the War is not one which, to say the least of it, calls for any intervention on the part of the War Office.

Mr. COOTE: Is the right hon. Gentleman aware that this is not a circular directed to Catholic soldiers, but to all Irish soldiers, that it is for all Irish soldiers to have a family home in London in these chapels, and under these circumstances, is it fair, considering the feelings of these people, that this circular should issue to them?

Major GLYN: Before the right hon. Gentleman takes any steps, will he make inquiries of the regiments concerned, and make quite sure it is not their wish that this memorial should be asked for?

Mr. CHURCHILL: I do not see where we come in as a Government. If people seek consolation by these rolls, they have every right to do it.

GRAVE HEADSTONES (FAIR-WAGES CLAUSE).

71. Mr. HAYDAY: asked the Financial Secretary to the War Office whether a contract has been placed with Messrs. J. Murray and Sons, Corse Hill Quarry, Annan, for a number of headstones to be used in France in memory of the fallen soldiers; whether he is aware that this firm are paying to workmen in their employ less than the standard rate of the
district, thereby violating the Fair-wages Clause; and whether he will have inquiries made into this matter?

Sir A. WILLIAMSON: This is one of a number of firms throughout the country, with whom the Imperial War Graves Commission has placed a contract for the making of headstones. The Commission inserted in this as in all other such contracts a Clause embodying the terms of the Resolution passed by the House of Commons on 10th March, 1909, as to fair wages, assignment of the contract and sub-letting. The Commission has received no complaint of any breach of those terms, but inquiries will be made, and I shall be glad if the hon. Member will furnish me with any information he has received on the subject of his complaint.

Mr. BILLING: Do the Government make it a condition that every man working on a contract must be a member of a trade union? If not, how long is it since the Government became agents for trade unions?

Sir A. WILLIAMSON: I am not able to answer offhand, but the Resolution has been referred to and the hon. Gentleman will find it in, the proceedings of this House.

FOOT GUARDS.

43. Major GLYN: asked the Secretary of State for War what were the authorised establishments and the ration strengths of the five regiments of Foot Guards, separately, on the following dates: 1st June, 1919, 31st December, 1919, and 1st June, 1920; whether the Grenadier and Coldstream Guards are now closed to recruiting, being up to establishment; and what special steps are being taken in Scotland, Wales and Ireland to obtain recruits for those regiments?

Mr. CHURCHILL: The answer to the first part of the question involves a lengthy statement of figures and, with the hon. and gallant Member's permission, I will circulate it in the OFFICIAL REPORT. As regards the second and third parts of the question, the Grenadier Guards and the Coldstream Guards are not closed to recruiting, and no special steps are being taken in Scotland, Wales or Ireland to obtain recruits for these two regiments.

The following is the statement referred to:


AUTHORISED ESTABLISHMENT AND RATION STRENGTH, REGIMENTS OF FOOT GUARDS.


—
*Establishment.
Strength.


Officers.
Other Ranks.
Total Ranks.
Officers.
Other Ranks.
Total all Ranks.



1st June, 1919.


Grenadier Guards
106
3,096
3,202
220
3,258
3,478


Coldstream Guards
106
3,098
3,204
237
3,694
3,931


Scots Guards
73
2,128
2,201
124
1,598
1,722


Irish Guards
40
1,124
1,164
90
955
1,045


Welsh Guards
37
1,064
1,101
71
761
832


Guards Depot, Caterham
3
6
9
3
7
10



31st December, 1919.


Grenadier Guards
106
3,096
3,202
107
1,789
1,896


Coldstream Guards
106
3,098
3,204
94
2,011
2,105


Scots Guards
73
2,128
2,201
74
935
1,009


Irish Guards
40
1,124
1,164
55
656
711


Welsh Guards
37
1,064
1,101
45
556
601


Guards Depot, Caterham
3
6
9
3
7
10



† 1st May, 1920.


Grenadier Guards
106
3096
3202
96
2041
2317


Coldstream Guards
106
3098
3204
94
2325
2419


Scots Guards
73
2128
2201
54
1133
1187


Irish Guards
40
1124
1164
41
789
830


Welsh Guards
37
1064
1101
34
694
728


Guards Depot, Caterham
3
6
9
3
7
10

* Pending the fixing of New Peace Establishments, battalions of Foot Guards, on arrival from abroad, have been retained on War Establishments.

† Latest figures of "Strength" available.

Major GLYN: I apologise for the bad drafting of my question. I intended to convey what steps are being taken to recruit Irish Guards in Ireland, Welsh Guards in Wales, and Scotch Guards in Scotland.

Mr. CHURCHILL: I think the hon. and gallant Gentleman's bad drafting must be my excuse for asking for further notice.

Oral Answers to Questions — IRELAND.

JUDGES (ASSIZES).

46. Colonel ASHLEY: asked the Prime Minister what steps the Government intend to take to ensure that His Majesty's judges with their escorts will be carried on the Irish railways during the forthcoming assizes?

The ATTORNEY-GENERAL for IRELAND (Mr. Henry): The necessary steps
have been taken to ensure that His Majesty's judges shall arrive in safety at the Assizes which opened on Thursday last. The arrangements have been made after consultation with the judges.

DISTURBANCES.

33. Lieut.-Commander KENWORTHY: asked the Secretary of State for War whether he has yet received a report of the recent occurrences at Fermoy, Lismore, and Limerick City, when soldiers are stated to have damaged shops and houses in those towns; and whether he is yet in a position to make any statement?

Mr. CHURCHILL: The circumstances under which the recent outbreak occurred at Fermoy and Lismore are at present being investigated by the military authorities. I am not aware of any recent disturbances involving the troops at Limerick City.

Lieut. - Commander KENWORTHY: Will the right hon. Gentleman make a statement when the investigation is complete?

Mr. CHURCHILL: I do not know. I will see what is the result of the investigation, and the disposition on the part of the House.

Captain W. BENN: Is it intended to offer any compensation to persons who suffered?

Mr. STANTON: What about the people who suffered with them?

Mr. CHURCHILL: That has absolutely nothing to do with the question.

Mr. DONALD: Is the right hon, Gentleman aware that considerably more damage was done in Ireland by the disturbances caused by rebels in that country?

Lieut. - Commander KENWORTHY: Rebels in Ulster?

Mr. DONALD: There are no rebels in Ulster.

41. Mr. SITCH: asked the Secretary of State for War whether his attention has been drawn to the recent rioting in Fermoy; whether he is aware that a number of officers participated in these riots; and whether he can state if any disciplinary action has been, or will be, taken against them?

Mr. CHURCHILL: The matter is at present being investigated by the military authorities. So far as is known no officers participated in the disturbances.

Captain BENN: Is it intended to compensate people who suffered in these disorders?

Mr. SPEAKER: The hon. and gallant Gentleman should give notice of that question. It does not arise.

ATTACK ON SOLDIERS, ENNIS.

70. Sir W. DAVISON: asked the Secretary of State for War whether he is now in a position to inform the House whether an armed guard of six soldiers in the charge of a corporal, while marching through the streets of Ennis, were seized by a number of men and robbed of their rifles, bayonets, ammunition, and helmets; whether the soldiers made any and what
resistance; whether any of the attackers have been apprehended or any of the rifles or ammunition recovered; and what is the reason for not proclaiming martial law in districts which are entirely under the control of the Sinn Fein organisation and the ordinary law has ceased to operate?

Mr. CHURCHILL: I am informed that an armed guard was attacked in Ennis in the circumstances stated, and that resistance was offered by the guard. One non-commissioned officer and one assailant were wounded. None of the assailants have been apprehended. An inquiry is being held by the military authorities.

Colonel ASHLEY: Are we to understand that an officer in charge of a body such as this is authorised to open fire?

Mr. CHURCHILL: Yes.

Sir W. DAVISON: Is it not very hard on our soldiers to have to act as though they were in a peaceful country, when war has been proclaimed on them by the population among whom they are acting?

Mr. CHURCHILL: Clearly it is impossible for the soldiers to make an attack upon the inoffensive civil population of the country.

Lieut.-Colonel CROFT: Have any of the Sinn Fein leaders in Ennis been arrested?

Mr. CHURCHILL: I do not know about that.

Lieut.-Colonel CROFT: Is not the first thing to be done to arrest the leaders of these movements in every part of the country. Unless you do that can you hope for any improvement?

Lieut.-Commander KENWORTHY: Has not that been the Government policy for the last twelve months, and is it not the fact that it had no effect whatever?

HUNGARY.

48. Colonel WEDGWOOD: asked the Prime Minister whether he has yet any information from Hungary as to the freedom or arrest of Lieutenant Hejjas and as to the political situation in that country?

Mr. HARMSWORTH: His Majesty's representative at Budapest has been asked to furnish information on the subject of Lieutenant Hejjas's activities. I hope to be in a position to make a statement shortly.

Colonel WEDGWOOD: The hon. Gentleman cannot yet say then whether Lieutenant Hejjas is in prison, as we were told about a fortnight ago?

Mr. HARMSWORTH: No.

PALESTINE (MANDATE).

45. Sir P. MAGNUS: asked the Prime Minister when the terms of the mandate for Palestine will be published; and whether, in any case, he will arrange that the terms shall be published before the mandate is finally confirmed by the Council of the League as in the case of the draft covenant?

Mr. BONAR LAW: It is impossible to name a date which is dependent upon the conclusion of the Treaty with Turkey. As regards the last part of the question, I do not think there would be any advantage in adopting the course suggested.

CANADA AND FRANCE.

52. Mr. HURD: asked the Prime Minister if any steps have been taken to negotiate a fresh commercial convention between Canada and France; and whether His Majesty's Government will suggest to Canadian Ministers the mutual advantages of the joint negotiation by the nations of the Empire of commercial arrangements with foreign Powers?

Mr. BONAR LAW: The answer to the first part of the question is in the negative. As regards the second part, I do not think that the suggestion put forward would be feasible in practice.

Mr. HURD: Has it not been under discussion at any time between the Governments of the Empire?

Mr. BONAR LAW: Not recently, I believe.

Oral Answers to Questions — TURKEY.

GREEK OPERATIONS (MILITARY MISSIONS).

44. Mr. MALONE: asked the Secretary of State for War what is the size of the military missions attached to the Greek forces operating against Turkey; and what are the duties of the British officers so employed?

Mr. CHURCHILL: The Mission consists of Major-General Sir G. T. M. Bridges, K.C.M.G., C.B., D.S.O., an aide-de-camp, and two officers. Their duties are those of intelligence and liaison.

Oral Answers to Questions — TRANSPORT.

RAILWAY SERVANTS (PENSIONS).

47. Mr. WATERSON: asked the Prime Minister if any steps have been taken to put into operation the Resolution passed in this House on 2nd March last relating to the inadequacy of the pensions paid to superannuated railway servants?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I have been asked to answer this question, and I would refer the hon. Member to the replies given to the hon. and gallant Member for St. Pancras South-West on the 1st instant, and to the hon. Member for Watford on the 28th ultimo.

Mr. WATERSON: Is the hon. Gentleman aware that these replies are simply negatives? We want to know what is being done by the Department.

Mr. NEAL: The Department has no powers to do anything. The matter is one for the railway companies.

NORTH-EASTERN RAILWAY COMPANY.

65. Mr. PALMER: asked the Chancellor of the Exchequer whether the demand which has been referred back to the company by the Financial Department of the Ministry of Transport that the payment of £50,000 to the ex-deputy general manager of the railway, in settlement of an agreement arrived at in 1912 and determined in 1919 should be made under the State guarantee, has yet come before his Department; and, if so, what decision has been arrived at?

Mr. CHAMBERLAIN: My attention was called to this matter some time ago
by my right hon. Friend the Minister of Transport (Sir Eric Geddes) who requested, that since he was personally concerned, the subject should be dealt with by the Treasury and not by the Ministry. I have instructed Sir Hardman Lever, the Treasury representative in the Ministry, not to admit the payment as chargeable against the Government guarantee.

RAILWAY PASSES.

66. Commander BELLAIRS: asked the Chancellor of the Exchequer, in view of the fact that railway passengers pay Income Tax on such income as they spend on travelling, whether he can state if railway directors and officials who are given free railway passes are assessed for Income Tax on the value of their free passes?

Mr. CHAMBERLAIN: Under the present Income Tax law remuneration or allowances in kind are not treated as the income of the recipient unless capable of being turned into money.

67. Commander BELLAIRS: asked the Chancellor of the Exchequer whether he is aware that many railway directors and officials are given free railway passes on all the railways of the United Kingdom, including those quite unconnected with their work; whether he can say if this privilege extends to the 50 per cent. increase in fares made during the War by the Government; and, if so, whether he can state the grounds on which such a special favour was conferred?

Mr. NEAL: I have been asked to answer this question. I can add nothing to the reply given to the hon. and gallant Member on the 1st instant.

Commander BELLAIRS: Is the right hon. Gentleman aware that these passes have been considerably extended during the War; that they are much more valuable now; that they are given to the families of officials as well and that if a shareholder—since putting down the question, I have had a letter from a shareholder—complains to the manager of a railway, he is informed that it has to do with the Government? If that is so, why does not the Government deal with the matter?

Mr. NEAL: I am not aware of the facts mentioned by the hon. Member, but if he will give me any instances where these
passes have been issued to members of the families of directors or officials, I should be very glad to look into it.

Mr. PALMER: Is the hon. Member aware that every free pass given to a railway official comes out of the pockets of the British taxpayer?

CANADIAN AMBASSADOR, WASHINGTON.

53. Mr. HURD: asked the Prime Minister if he is aware that the Canadian House of Commons has had two discussions of the changes in inter-imperial and international relations involved in the appointment of a Dominions Minister at Washington with Ambassadorial powers; and when this House will be given the opportunity of one such discussion?

Mr. BONAR LAW: The answer to the first part of the question is in the affirmative. I am afraid that no time will be available at present.

Mr. HURD: Will there be time after the Recess?

Mr. BONAR LAW: If I learn that there is a general desire for discussion, I shall try to find time for it.

CIVIL AVIATION.

55. Major-General SEELY: asked the Lord Privy Seal whether the Government have considered the recently published Report of Lord Weir's Committee on Civil Aviation; and what action it is proposed to take in the matter?

Mr. CHURCHILL: I have been asked to answer this question. The Report is still under the consideration of His Majesty's Government, and no final decision has yet been reached.

Major-General SEELY: Can the right hon. Gentleman say when it is likely that a decision will be taken on this very important matter? The Report has been in for some time. It was drawn up more than two months ago. Can the right hon. Gentleman give any idea when there will be a decision?

Mr. CHURCHILL: I cannot give a date. I hope it may be possible in the course of the present month.

Mr. BILLING: Is the right hon. Gentleman aware that there is complete stagnation in civil aviation pending a decision on this matter?

Mr. CHURCHILL: I am not aware that there is complete stagnation. On the contrary, a considerable amount of progress has been made.

UNEMPLOYMENT.

56. Mr. LYLE: asked the Lord Privy Seal if he will devote a day to the discussion of the rapid increase of unemployment, its causes, and their remedy?

Mr. BONAR LAW: The information at the disposal of the Government is to this effect, that, so far from unemployment increasing, as stated in the question, the reverse of is the case, and the high level of employment shown in the early part of 1920 has not only been maintained, but has, in a number of cases, improved.

Oral Answers to Questions — FINANCE BILL.

INCOME TAX.

59. Mr. RAPER: asked the Chancellor of the Exchequer if he will consider granting a reduction of Income Tax for contributions or gifts made within the taxable year to organisations of a charitable, scientific, or educational nature, or for the prevention of cruelty to children or animals, no part of which contributions or gifts convey any benefit to an individual, to an amount not in excess of 5 per cent. of the taxpayer's net income as computed without the benefit of such deduction?

Mr. CHAMBERLAIN: There are very strong objections to the course suggested by my hon. Friend, but they will be better stated in Debate on the Finance Bill, where the subject is raised by more than one Amendment on the Paper.

61. Mr. R. YOUNG: asked the Chancellor of the Exchequer whether a married man separated from his wife by a deed of separation is entitled to claim exemption from Income Tax in respect of his wife; if so, what is the lowest weekly
or other payment he must make to his wife to justify the full exemption allowed by Statute; and if there is any difference when separation is legally placed to the fault of the woman?

Mr. CHAMBERLAIN: The Income Tax marriage allowance applies only where the husband and the wife are living together. If, however, a married man, separated from his wife by a deed of separation, constitutes a charge on his income in favour of his wife, he is entitled to deduct Income Tax from the payments made. In such circumstances, the wife is regarded as a separate individual for Income Tax purposes, and, equally with the husband, can claim the personal allowance applicable to an individual, and also any other reliefs to which she may be entitled in respect of her income.

63. Mr. PRESTON: asked the Chancellor of the Exchequer when a claim for repayment of Income Tax made to Somerset House in May should be settled, provided that such claim is in order; whether, seeing that the new Finance Bill will entitle thousands of married people who have never claimed before to claim a repayment of Income Tax on the first £225 of income, these claims will necessitate an increase of staff; and, if so, what increase is considered likely to be required?

Mr. CHAMBERLAIN: The bulk of the claims for repayment of Income Tax which were received in May last have already been allowed. Claims are examined in rotation in the order in which they are received, and until they have been examined repayment cannot be made. With regard to the latter part of the question, I would refer my hon. Friend to the reply which I gave him on the 30th ultimo.

EXCESS PROFITS DUTY.

60. Sir FREDERICK YOUNG: asked the Chancellor of the Exchequer whether the Inland Revenue authorities are now taking legal steps to collect Excess Profits Duty from companies and persons whose profits have been made in the Dominions and have already been subjected to a heavy Dominion Excess Profits Tax; and whether the Government can take any steps to alleviate the position of Empire businesses so that
they will not be called upon to bear the burden of double taxation in this direction?

Mr. CHAMBERLAIN: Where liability to Excess Profits Duty arises in cases of the kind which my hon. Friend has in mind, steps are taken by the Commissioners of Inland Revenue to collect the duty in conformity with the statutory provisions relating thereto. As regards the latter part of the question, a deduction is allowed in computing profits for purposes of the Excess Profits Duty for any payment on account of Excess Profits Duty imposed by a Dominion. Provision is also contained in Section 23 of the Finance Act, 1917, under which reciprocal arrangements may be made between the British and Colonial Governments for granting relief in respect of double charges of Excess Profits Duty. One such arrangement—which can, of course, only be made by agreement with the Colonial Government—has already been made.

Sir F. YOUNG: Am I to understand that, although these arrangements are come to, firms are called upon to pay this double taxation, although for some time the authorities have been observing a more lenient attitude? Is it the definite policy of the Government to collect the two taxes?

Mr. CHAMBERLAIN: The statutory concession is subject to the conditions laid down by Statute. I cannot extend it. I do not know what change of practice my hon. Friend alludes to; but perhaps he will speak to me about it.

OLD AGE PENSIONS.

62. Sir JOHN BUTCHER: asked the Chancellor of the Exchequer whether his attention has been called to the hardship inflicted on old age pensioners by being obliged to include in their income, for the purpose of assessing their pension, all purely voluntary allowances and gifts; and whether he will introduce legislation to remove this hardship?

Mr. CHAMBERLAIN: The Old Age Pensions Committee of last year were of opinion that it was impossible to differentiate equitably between the various kinds of means possessed by Old Age Pensioners. No such differentiation was accordingly attempted in the Act passed
in December last, and I am not now prepared to re-open the settlement then made, which itself added £10,000,000 to the annual charge on the taxpayer.

PUBLIC EXPENDITURE (COMMITTEES).

64. Captain TUDOR-REES: asked the Chancellor of the Exchequer whether he has now received answers from those who have been invited to sit on Committees appointed for the purpose of making test investigations with a view to the reduction of expenditure in public Departments; and, if so, whether he will give the names of the members of such Committees and state when they propose to begin their inquiries?

Mr. CHAMBERLAIN: We are attempting to form 7 Committees, each consisting of one Member of Parliament as Chairman, one man of business and one official selected from a different branch of the public service, to investigate the seven following Departments:—Ministry of Agriculture, Ministry of Labour, Ministry of Munitions, Board of Trade, Department of Overseas Trade, National Savings Committee, Royal Commission on the Sugar Supply. Of these the Committee for the Labour Ministry is complete, and consists of my hon. and gallant Friend the Member for Uxbridge (Lieut.-Colonel Sidney Peel, D.S.O.), Sir John Mann, K.B.E., and Sir Charles Walker, K.C.B., Accountant-General of the Navy. We have not yet been able to complete the other Committees, but I shall be glad to give their composition as soon as we have secured Gentlemen to serve on them.

Mr. BILLING: Is it proposed to limit the selection of members of this Committee to the hearty supporters of the Government, or will the Committees be selected from those who may be critics of the Government?

Mr. CHAMBERLAIN: My experience is that, whatever people may feel towards the Government, they are all critics of the Treasury.

Sir J. BUTCHER: Will the right hon. Gentleman consider the propriety of appointing a Committee to examine the expenditure of the Education Department?

Mr. CHAMBERLAIN: I will consider that.

Oral Answers to Questions — ROYAL AIR FORCE.

MARRIED ESTABLISHMENTS.

72. Sir W. JOYNSON-HICKS: asked the Secretary of State for Air whether the question of married establishments for officers and men of the Royal Air Force has yet been decided?

Mr. CHURCHILL: It is almost certain that a married establishment will be approved, but it should be remembered that the provision of this establishment entails, in addition to other expenses, a serious increase in the Building Vote.

Sir W. JOYNSON-HICKS: When will they be approved and when will there be any chance of the officers and men of the Air Service being allowed to have their wives in India?

Mr. CHURCHILL: I am still engaged in discussion with my right hon. Friend the Chancellor of the Exchequer upon the subject, and it is obvious that there are two sides to this question.

Sir W. JOYNSON-HICKS: Could it not be paid for out of the Indian finance?

Mr. CHURCHILL: I am also engaged in discussion with the Secretary of State for India.

Sir W. JOYNSON-HICKS: I think that that is a better shot.

ZEPPELIN "L 71."

74. Viscount CURZON: asked the Secretary of State for Air whether it will be possible for the "L 71" Zeppelin airship to make a cruise over London at at early date to give the inhabitants as close a view as possible of this type of airship?

Mr. CHURCHILL: I hope that the public may have opportunities of seeing this airship at some future date, but at the present time a cruise such as that suggested would mean the diversion of men and money from more important work.

MINISTRY OF AIR (TEMPORARY STAFF).

73. Lieut.-Colonel PARRY: asked what are the temporary circumstances which make it necessary to maintain a temporary staff of 2,007 at the Air Ministry;
what is the annual cost of this staff; and when it is anticipated that the need for their services will cease?

Mr. CHURCHILL: The figure for this permanent staff corresponding, for the same date, i.e., 1st May, to 2,007 was 757, but it is of course not contemplated, and would not be possible, to reduce the Air Ministry staff to this latter figure, as is apparently suggested in the last part of the question. The reasons why so large a portion of the total staff are at the present time on a temporary basis are as follows:—
(1) The Departments of Civil Aviation, Supply and Research and Works and Buildings have been advisedly engaged on a temporary footing in the first instance. As the eventual requirements and commitments of the Ministry become better defined, the numbers will be reviewed and where necessary reduced.
(2) Messengers, labourers, cleaners and some other similar categories are normally engaged on a temporary basis in all Government Departments.
(3) The Air Ministry is a new Department, and progress in obtaining permanent staff must needs be gradual.
The annual cost of the total temporary staff is about £540,000. The number of the temporary staff is being progressively reduced both by replacement by permanent staff and by discharge without replacement.

MOTOR CAR ACT (POLICE CONTROLS).

75. Viscount CURZON: asked the Secretary of State for the Home Department how many police controls were in operation in the Metropolitan Police area for detecting infringements of the Motor Car Act between a.m. 3rd July and p.m. 5th July; how many police officers were employed; and with what success?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): There were 94 controls during the three days; 71 officers were employed, and 145 cases were reported for prosecution.

CHOCOLATE (SALE IN THEATRES).

76. Viscount CURZON: asked whether it is intended to continue the regulation
under the Defence of the Realm Act prohibiting the sale of chocolates in theatres?

Mr. SHORTT: Yes, Sir.

THEODORE SCHLAGENTWEIT.

79. Sir W. JOYNSON-HICKS: asked the Secretary of State for the Home Department whether he has completed his inquiries into the case of Theodore Schlagentweit, and with what result?

Mr. SHORTT: I have examined the statements in regard to Theodore Schlagentweit submitted to me by the hon. Baronet, but I do not find that they would have affected the decision under which in 1915 Schlagentweit was included in a party of Germans for repatriation in exchange for British officials and other civilians.

Oral Answers to Questions — SCOTLAND.

FIARS PRICES.

81. Colonel Sir A. SPROT: asked the Secretary for Scotland whether it is intended to bring in a Bill dealing with the question of fiars prices, seeing that it is reported that agreement has been reached between the representatives of the Church and the other parties interested in the question?

Mr. C. D. MURRAY: I would refer my hon. and gallant Friend to the reply given by my right hon. Friend on the 1st instant to a question on this subject by the hon. and gallant Member for Midlothian and Peebles. He is not yet in a position to add to that reply.

HOUSING (LANARKSHIRE).

82. Sir A. SPROT: asked how many housing schemes have been sanctioned for the district of the lower ward of Lanarkshire and for how many houses; and whether any houses have been completed or commenced in this district and what are the numbers of each?

Mr. MURRAY: A scheme for 800 houses in the district referred to has been approved by the Scottish Board of Health. These houses will be distributed over a number of sites, ten of which have already been approved. No houses have been commenced or completed under this scheme, but it is anticipated that tenders
involving 128 houses, apportioned over two sites at Gartcosh and Bishopbriggs, will be invited very soon.

TEMPERANCE (SCOTLAND) ACT, 1913.

83. Major MACKENZIE WOOD: asked what steps it is proposed to take to bring under the local option provisions of the Temperance (Scotland) Act, 1913, the premises in Scotland at present occupied by the Central Control Board (Liquor Traffic) for the purpose of the sale by retail of exciseable liquor for which no certificates, within the meaning of the definition contained in Section 15 of the Act, have been granted by the licensing courts.

Mr. MURRAY: The matter referred to in the question is receiving consideration by my right hon. Friend in consultation. with the Departments concerned. He hopes to be in a position to make a statement at an early date.

MORAY FIRTH (TRAWLING).

86. Sir A. SPROT: asked the Secretary for Scotland whether he is aware that fishermen are complaining of the laxity of the authorities in enforcing the law regulating trawling in the Moray Firth; and whether he will take steps to ensure greater vigilance and severity in dealing with offenders?

Mr. MURRAY: I would refer my hon. and gallant Friend to the reply given on the 14th May last to a question on this subject by the hon. Baronet the Member for Caithness and Surtherland.

Lieut.-Colonel A. MURRAY: May we be assured that something is being done in this matter?

Mr. MURRAY: If my hon. Friend will refer to my reply he will see what has been done, and I think it will satisfy him.

Dr. MURRAY: Is it not possible that the Moray Firth may have been cleared of fish by trawlers since May last?

Mr. A. M. SAMUEL: Is the hon. and learned Gentleman aware that, in the opinion of many competent authorities, trawling in the Moray Firth, so far as herring are concerned, is not detrimental?

Mr. MURRAY: That is a matter for experts.

CHEPSTOW SHIPYARD.

87. Mr. LAMBERT: asked the Parliamentary Secretary to the Shipping Controller to what Department buildings at Chepstow yard costing £187,000 have been transferred; and what was the actual tonnage and value of the ships completed, of which 15,312 tons and valued at £570,000 were in course of construction when the yards were taken over by the Government?

The PARLIAMENTARY SECRETARY to the MINISTRY of SHIPPING (Colonel Leslie Wilson): The Mount Pleasant Hospital, Chepstow, costing £110,000 has been transferred to the Ministry of Pensions, and various buildings at the White City Depot, Bristol, costing £77,000, have been taken over by the War Office. Of the vessels acquired with the yard at Chepstow having an aggregate deadweight tonnage of 15,312 tons when completed about 11,900 tons valued at £446,000 was added after acquisition.

Oral Answers to Questions — FOOD SUPPLIES.

MEAT.

90. Mr. PALMER: asked the Minister of Food whether he is aware of the complaints of London butchers that they are not permitted to buy frozen meat in good condition unless they agree to take a large percentage of inferior meat; that they are not able to purchase home-killed meat without buying at the same time a proportionately larger amount of unwholesome mutton, much of which is in a state of actual decomposition; whether, as a result, butchers have refused to take meat for sale, particularly in the poorer districts of London; and whether, in view of the gravity of these allegations, which are made by responsible persons in the meat trade, he can make any reassuring statement?

The MINISTER of FOOD (Mr. McCurdy): As regards the first part of this question, I would refer the hon. Member to the reply given on this subject to the hon. Member for Bradford on the 24th ultimo. There is no foundation whatever for the suggestion contained in the second part of the question. I have made inquiries on this matter, and am satisfied that no such suggestion has been made by any responsible person in the
meat trade. At a recent meeting with a deputation of the Union of London Retail Meat Traders' Association, representing the large majority of London butchers, I made express inquiries on this point, and was assured that no such complaint was made on behalf of the trade. All meat sold is subject to careful inspection by properly qualified Health Officers to ensure that no meat unfit for consumption is permitted to be offered for sale.

Mr. PALMER: If I bring the right hon. Gentleman samples of the meat, will he look into the matter?

Mr. McCURDY: Certainly, but I may say that I have had several consultations with the body which represents the whole of the retail meat traders of the Metropolis. I have had very careful inquiry made into the matter, and have given the hon. Member the result of that inquiry. I will make further inquiry on any further information.

Mr. TERRELL: May I ask whether the bodies the right hon. Gentleman has consulted, the retail butchers, are perfectly satisfied with the arrangements of his Department?

Mr. McCURDY: The main question relates to the quality of the meat. The supplementary question is a general question as to the arrangements made by my Department. If the hon. Member will furnish me with any particulars as to what arrangements he refers to, I shall be very happy to answer that question also.

DIVISIONAL FOOD COMMISSIONER, NORTH MIDLANDS.

91. Mr. WATERSON: asked the Minister of Food if the Divisional Food Commissioner for the North Midlands area is giving the whole of his time to his duties; whether he is the proprietor of a large business at Lea Mills, near Matlock; and can he state whether, in addition to his salary, he is allowed travelling and other expenses?

Mr. McCURDY: The whole time of the Divisional Food Commission for the North Midland Division continues to be, as hitherto, at the disposal of the Ministry when required. As, however, the appointment is only temporary, terminable at a month's notice on either
side, arrangements were made when he was originally appointed in 1917 enabling him to continue his own business as chairman of a limited company near Matlock. As regards the third part of the question, the Divisional Food Commissioner receives the usual allowances when travelling on the business of the Ministry. I should like to add that the Divisional Commissioner has on two occasions withheld his application to be released in deference to my special request.

Mr. WATERSON: Am I to understand that this gentleman receives £900 a year for a temporary position of this character?

Mr. McCURDY: Yes, Sir.

AGRICULTURE BILL (MARKET GARDENERS).

92. Mr. GWYNNE: asked the Parliamentary Secretary to the Ministry of Agriculture whether his attention has been called to the fact that, whilst horticulturists and market gardeners come under the Agriculture Bill as regards increase in wages for their employés, no benefits or guarantees are promised to them, in spite of the fact that they have to compete in perishable goods in the open market with produce grown in foreign countries by cheaper labour; whether he is aware of the widespread apprehension which exists among the growers; and what steps he means to take to encourage rather than discourage the production of fruit, vegetables, and other garden produce in this country?

The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Sir A. Boscawen): It would not be practicable to extend the principle of guaranteed minimum prices to articles of produce other than corn, but I may point out to my hon. Friend that horticulturists and market gardeners will obtain substantial advantages under Sub-section (3) of Clause 9 of the Agriculture Bill, which brings into force and gives statutory authority to the Evesham custom.

Mr. GWYNNE: Will the right hon. Gentleman answer the last part of my question.

Sir A. BOSCAWEN: We are of opinion that the adoption of the Evesham custom will encourage the production of fruit and vegetables.

Mr. GWYNNE: That refers only to a man leaving. What is going to happen when he is staying on?

BUSINESS OF THE HOUSE.

Mr. HOGGE: May I ask the Leader of the House what business it is proposed to take after the Finance Bill to-night?

Mr. BONAR LAW: We propose to take Report of the Financial Resolution of which the Committee was taken last night.

GOVERNMENT OF INDIA ACT, 1919 (DRAFT RULES).

Special Report from the Joint Committee brought up, and read;

Report to lie upon the Table, and to be printed. [No. 140.]

BANK NOTES (IRELAND) BILL.

Reported, without Amendment, from Standing Committee B.

Report to lie upon the Table, and to be printed. [No. 141.]

Minutes of the Proceedings of the Standing Committee to be printed. [No. 141.]

Bill, not amended (in the Standing Committee), to be taken into consideration To-morrow, and to be printed. [Bill 159.]

MESSAGE FROM THE LORDS.

Criminal Law Amendment Bill [Lords], the Criminal Law Amendment (No. 2) Bill [Lords], and the Sexual Offences Bill [Lords],—That they propose that the Joint Committee appointed to consider the above Bills do meet in Committee Room C, on Thursday next, the 8th of July, at Twelve o'clock.

Lords Message considered.

Ordered, That the Committee appointed by this House do meet the Lords Committee as proposed by their Lordships.—[Lord Edmund Talbot.]

Message to the Lords to acquaint them therewith.

LONDON COUNTY COUNCIL (TRAMWAYS AND IMPROVEMENTS) BILL.

Reported with Amendments [Title amended]; Report to lie upon the Table, and to be printed.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Mr. Baldwin.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee B (during the consideration of the Ministry of Mines Bill): Mr. Frederick Green; and had appointed in substitution: Colonel Burdon.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee B (during the consideration of the Ministry of Mines Bill): Mr. Herbert Lewis; and had appointed in substitution: Mr. Thomas Lewis.

Reports to lie upon the Table.

Orders of the Day — FINANCE BILL.

Considered in Committee. [Progress, 5th July.]

[Mr. WHITLEY in the Chair.]

CLAUSE 6.—(Increased Excise Duty on beer.)

In lieu of the duty of excise payable in respect of beer brewed in Great Britain or Ireland there shall, as from the twentieth day of April nineteen hundred and twenty, be charged, levied and paid, the following duty (that is to say):—



£
s.
d.


For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees … … …
5
0
0

and in lieu of the drawback of excise payable in respect of beer exported from Great Britain or Ireland, as merchandise or for use as ship's stores, there shall be allowed and paid in respect of beer on which it is shown that the increased excise duty charged by this Act has been paid a drawback calculated according to the original gravity thereof (that is to say):—



£
s.
d.


For every thirty-six gallons of beer of an original gravity of one thousand and fifty-five degrees the drawback of
5
0
3


and so, as to both duty and drawback, in proportion for any difference in quantity or gravity.

Question again proposed, "That the Clause stand part of the Bill."

Mr. BLAIR: I believe it is the desire of every hon. Member that the basis of taxation should be so designed as to be fair to all classes of the community. In this Clause there is a very heavy burden placed upon the consumer of beer. Our tax revenue, which is almost £1,000,000,000, or, to be exact, £998,000,000, is five and a half times our pre-War tax revenue. The proposal in the Bill is to put a duty on the standard barrel of beer of 100s. instead of 7s. 9d. what it was in pre-War times. Therefore the beer consumer has been burdened to the extent of thirteen times although the yield is now only eight and a half times. I maintain that this is a very unfair burden. The few figures I have given prove conclusively to my mind that the burden has been most inequitably distributed and that this is very oppressive taxation which has added very materially to the reduction in consumption of beer. If my hon.
and gallant Friend should decide to go to a Division I shall have great pleasure in supporting him.

Brigadier-General WIGAN: I should also like to support the opposition to this proposal. The hon. and gallant Member for Burton (Colonel Gretton) has pointed out that the duty now proposed to be placed on beer is twelve times the pre-War amount, and that the consumer has to pay three times as much for a pint of beer as he did in 1914. The Chancellor of the Exchequer has stated that the amount of beer consumed in this country depends upon employment and wages.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I should have included the weather as an important factor.

Brigadier-General WIGAN: No doubt the weather is an important factor, but employment and wages are rather more important. I believe beer to be the cause of very little drunkenness, and that drunkenness in the years gone by was caused almost entirely by raw spirits sold in a certain class of public-house. I do not in the least quarrel with the proposal to tax spirits or luxury champagne as far as they will bring in revenue. Beer is hardly a luxury. A man who is doing a hard day's manual work is, in my opinion, all the better for a glass of beer, and I do not see why, through the direct action of the State, he should be asked to pay three times as much now as he did in 1914.
4.0 P.M.
It might be interesting if I told the Committee the experience that we had in Palestine in 1917. When the Army was right up country, there was a very great deal of sickness owing to septic sores, and when we were able to get beer, the sickness decreased by something like 80 per cent. As soon as this was realised, the Army authorities gave every facility for beer being got up to the men. It was appreciated by the men, and their health very greatly improved. These are facts which can be borne out by those who were there. Further, I believe that the Government would do a great deal more good if they would do what they could to encourage the growing of barley and hops in this country, thereby preventing very large sums of money going out to America and elsewhere for articles which
we might very well produce at home. I believe that by increasing the taxation on beer up to 100s per barrel the right hon. Gentleman will largely defeat his own ends. Therefore, on that ground, and on the ground that you are taxing the working man's beverage, I shall support the Amendment.

Mr. CLYNES: In addressing the Committee, I must be taken as speaking for the constituency that I represent rather than on behalf of my hon. Friends on this side of the House, because here, as in other parts of the Committee, there are differences of opinion on this question. I want to make my observations mainly because of what the Chancellor of the Exchequer said last night in the few observations which he addressed to the hon. and gallant Member who moved the Amendment. His view was that if beer drinkers did not pay in this manner then, being taxpayers, they would have to pay in some other form. Therefore, they might just as well pay in this form, as in any case they would have to find the money. Naturally, the Chancellor of the Exchequer looks at all these questions from the standpoint of revenue, but there is one aspect of the question which, I think, has escaped him. While persons in all classes of the community drink beer more or less, there is one considerable section, being rather poor people, who drink beer to a degree greater than others. They drink beer largely because of their occupation and because of their pockets. They cannot afford the more costly drinks. The extent to which taxation on this article has been increased is such as to require the Chancellor to call a halt. At any rate, I would not like him to be under the impression that in increasing the duty to 100s., and perhaps a higher figure, he has the full approval of the House. The tax upon beer has been raised from something short of 8s. pre-War, to 100s. now. That is a greater increase than scarcely any other article has been called upon to bear. It is taxation which is really too heavy, and it falls with most unjust incidence upon the class of the community that I have in mind, such as gas workers, factory operators, men employed in chemical works, in brickmaking, in the building trades, and in steel works I should say that millions of men in these laborious occupations have become beer
drinkers partly because of their occupations and partly because of the price. Beer now, however, is so heavily taxed that, as in the case of these persons, it forms a very serious item in the increased cost of living. I do not know whether the figures show that consumption has appreciably declined, but it is clear that while this enormous increase has occurred in the price, the quality has very greatly declined. This has ceased to be a brewers' question. The conflict now is not between the brewer and the retailer, though they have their own quarrels and their own interests, and the Committee ought to consider the matter from the standpoint of the consumer. We ought, therefore, to have from the Chancellor of the Exchequer some more reassuring statement than that which he gave us last night. He ought to take into account the particular articles which weigh very heavily on those with low wages and whose past habits and customs require them to be considered as beer consumers.

Rear-Admiral Sir R. HALL: I should like to associate myself with the remarks of the right hon. Gentleman who has just sat down. It is not a question of the brewers at all; it is a question of the consumers. I have a suspicion that this tax may not be imposed altogether for revenue purposes. It may be part of a big policy to make England "dry" by making liquor so expensive that nobody can buy it. Feeling as I do that beer is part of the sustenance of a very large number of people in this country, I think that this enormous increase from 70s. to 100s. per barrel is savage taxation, and for that reason I shall support the reduction.

Mr. CHAMBERLAIN: I agree with the right hon. Gentleman opposite (Mr. Clynes) and with the opening observation which fell from my hon. and gallant Friend (Sir R. Hall) that this is, in fact, a question between the Government and the consumer. It is a question how the revenue should be raised, and it is not now a question between the Government and the trade, because the great bulk of the duty will be collected by the increased charge to the consumer. My right hon. Friend opposite seemed to think that I was harbouring the idea that the beer barrel was an inexhaustible source of wealth. I do not think so. I admit the onerous character of the charge which we
have put upon it, but I beg my right hon. Friend to remember that there is not a single tax, or hardly a tax, which escapes criticism.

Captain O'GRADY: It is punitive.

Mr. CHAMBERLAIN: So I am told in relation to every tax, not by the same people, but by those who suffer or who think they suffer, or by the representatives of those who suffer. The same kind of arguments are employed. If it be any reassurance to my right hon. Friend and the other hon. Gentleman who have spoken for me to disclaim that you can go on increasing the duties on beer and spirits indefinitely, I can make that disclaimer. If, on the other hand, he asks me here and now to say that within a given time, irrespective of any change in the circumstances, I will reduce this duty, that is a pledge which I cannot honestly give. I should be misleading him and the Committee if I gave it. All I can say is that, as regards the ability of the trade to meet that portion of the charge which they are expected to meet, I must watch the conditions. They are not any longer allowed to recoup themselves without Government interference from the public, and therefore we must watch things. I feel, in the circumstances of the day, that I must call upon the beer drinker, as I have done upon the spirit drinker, the wine drinker, the payer of direct taxation, and the contributors of taxes which fall upon industry, to make these great sacrifices in the interests of national credit and stability. Yet I shall be as happy as anybody if the time comes within my tenure of office when, instead of having to add to taxation, I can begin to think about the relief of taxation.

Mr. MYERS: It cannot be denied that all legislation upon this question since the outbreak of the War has played right into the hands of the brewer. Every time that any extra tax has been put on, it has been passed on to the consumer, and has meant another addition to the brewer who has produced the commodity. When the Government restricted the quantity of liquor which could be brewed, the brewer, like the hypothetical workman about whom we have heard so much, brewed less and got more profit. The The next step was to reduce the gravity of the liquor. I cannot speak from experience, but I am told that the gravity
got so serious that it was not safe to have a glass of beer in the dark. I heard the same point put in another way. A gentleman called at a village inn for a glass of beer, and opened a conversation with the publican, who said, "It looks like rain?" "Aye," said the consumer, "and it tastes like it too." Down went the quantity and the quality, and up went the profits of the brewer! Every time that additional taxation has been imposed it has been passed on to the consumer, who has had to pay the brewer more than the tax. I am not so much concerned in this matter with the consumer, because he can dodge both the Chancellor of the Exchequer and the brewer. If he cares, he can adopt the policy of evasion or direct action to escape it, and he can beat both the Chancellor of the Exchequer and the brewer in the operation. Generally, the facts are as has been stated. Every attempt that is made plays right into the hands of the people who deal in this stuff, and the consumer pays all the time.

Mr. PRESTON: If this duty on beer be imposed purely as a revenue duty, why will not the right hon. Gentleman put a similar duty on ginger beer and lemonade and other noxious liquors that do more harm to the consumer than good honest beer. I have no interest whatever in beer, but there is a feeling right throughout the country that the Cabinet have been cornered by the temperance crowd, and that they are not putting on this taxation purely for the purpose of producing revenue.

Viscountess ASTOR: The hon. Member who has just sat down asked why they did not tax the sellers of lemonade and such drinks, but would he kindly look at the profits made out of beer and the profits made out of lemonade. He would see that the Chancellor of the Exchequer is quite right in taxing beer. When it is asked why are they all complaining of the tax on beer, the working man is complaining because the brewer is not being taxed enough. If anybody has any doubt about what the trade has made, I will ask them to go round the country and they will see that while other houses have fallen into disrepair, they will not see a public-house that is not painted up to the nines, and that is the reason why I join in asking that, if it is possible, the tax should fall
on the trade, which has never been more flourishing than it is at the present moment. I only regret the Chancellor of the Exchequer has not been captured by more of the temperance party, and my fear is that he has been captured by too much of the trade.

Lieut.-Commander KENWORTHY: I understand that this tax is expected to bring in £112,440,000 and that it is going to put up the price of a glass of beer to the working man by a penny a glass, and the only observation I would like to make, as one strongly in favour of temperance, is that I think that is an unfair incidence on the class of manual workers, who are, after all, in the aggregate the principal consumers of beer. I know that people who drink wines also consume beer in many cases, but it will not be disputed that the principal consumer of beer is the manual worker, urban and rural, and that this tax is going to take a good deal of money out of his pocket. There may be fanatical temperance reformers who would welcome that, but strongly as I am in favour of temperance, I think it will hit that class of the community particularly hard. I hope it will be understood that the money that is produced for the Exchequer from the beer tax is not going to the reduction of debt or to social services at all; it is not going indeed to meet the cost of the Government's wicked, indefensible expenditure in Russia alone.

Lieut.-Colonel CROFT: There have been words spoken in this Debate which have seemed to me to display a certain amount of ignorance on this question, and we have heard a reference to the rain-water brewed by the publican. I think it is only fair to say that the Government decides what is the price and what is the strength of the liquor which is sold, and it is not fair to throw that out as if it is any other party than the Government which is responsible. With regard to the gravity, this has been fixed by the Government since 1915. My own view is that the Chancellor of the Exchequer is in this cast adopting a policy which is going to re-act like a boomerang before very long. I believe it is true what the hon. Member for Plymouth (Viscountess Astor) has said, that there has been a temporary prosperity in certain branches of the trade in this country, but I would ask her to remember that
years ago, perhaps before she gave us such great delight in visiting this country as a permanent resident, there were many years in which thousands of people in this country lost large sums of money which had been invested in this industry, and it is very doubtful if those disadvantages have ever been made up by any advantage obtained in the last two or three years. If the Chancellor continues with this policy, it is not going to make this country happy, and I put it to him, with the possibility of a great trade depression which may come at any time, that it is a tremendous hardship to the working man to have to pay this enormous sum of money for his legitimate refreshment. This change is actually putting up the price of beer by a penny through the order of the Food Controller, and these are facts which ought to be realised. People are entitled to hold the view that it is wrong to drink a glass of beer, but the fact remains that to the vast majority of the ordinary good, honest, working men in this country it is the staple drink, and in many cases it is regarded as the staple food also, and when it is suggested that all other forms of drink should go free—

Mr. CHAMBERLAIN: Not by the Government.

Lieut.-Colonel CROFT: No, I do not mean that the Government are suggesting it, although I am sorry to see that there are omissions in the right hon. Gentleman's speeches with regard to ginger beer, etc.

Mr. CHAMBERLAIN: They are taxed. Mineral waters and ordinary forms of non-alcoholic drinks do pay taxation at the present time.

Lieut.-Colonel CROFT: I am well aware that the right hon. Gentleman has taken part in making consumers of these drinks pay through taxation on sugar, for instance, but sugar is very largely used in these other commodities, and I do not think he would endeavour to maintain in Debate that the drinker of lemonade is really bearing an equal burden compared with his fellow working man who is a drinker of beer. I think he realises that this is a penal taxation which is casting an enormous amount of taxation on the average worker and depriving him of his legitimate pleasures.

Captain O'GRADY: You cannot get down to the bed-rock of this question without finding that it is the workman who pays every time, and I suggest that no class in the community is so severely taxed as the working man. As a matter of fact, I am astonished that the Chancellor did not take his courage in both hands and transform the whole system of creating this revenue. On these benches we have for years been in favour of direct taxation, and personally I would tax even the servant girl on her wages, because then I think you would get equity and justice in these matters, but here you have a Budget in which every single tax is of a punitive character, and the result is that everyone grumbles. Take this tax on beer, which has gone up from 7s. 9d. per barrel in pre-War days to 100s. I suggest that there is no single tax in this Budget that equals that in amount. Last year the estimated revenue from this tax was £71,000,000, while this year it is £112,400,000. I appeal to the right hon. Gentleman that that is not equitable or fair. I represent a constituency in the great city of Leeds, where the great bulk of the men are iron founders or men in foundry works, mainly unskilled men, gas stokers, and so on, and it is no use burking the fact that these men must have beer. By the very nature of their industry the great bulk of these men are beer drinkers. During the War, a man came home from his work at 8 o'clock and walked two or three miles to his home, and when he got to the place where he had his usual pint, he found that somebody had come down in the meantime and had drunk up the average, with the net result that the man took to whisky drinking. Seriously, I suggest that one of the greatest dangers with which this country is faced is the possible diversion of the working man from being purely a beer drinker into a whisky drinker. I have known men tired and worn out after being in the munition works in Leeds, going to the usual place before they went home, and instead of spending about 1s. in beer, they have spent 4s. in whisky, and the net result is that you are gradually diverting men from drinking beer, which is requisite in the nature of their occupation, to drinking this wretched stuff that is sold as whisky. The effect of this tax will be something similar. The working man will say, "If I have to pay so much for my beer, I will take to whisky drinking," and I say quite
seriously that that is a great danger. Having regard to the fact that the tax has risen from 7s. 9d. in pre-War days to 100s. a barrel now, I shall go into the Lobby against the tax, and I hope it will be defeated.

Major KELLY: I do not believe in a purely destructive policy, and in destroying the policy of the Chancellor of the Exchequer without providing some source from which I can find him a revenue. I am interested in the trade, and I should not have risen to speak on this subject, because the Chancellor has to find the money, and I am quite willing to pay my share, unless I can find an alternative, which I cannot, but I wish to make two points quite clear. I am not here defending the brewers or anyone, but I do not think it ought to go forth throughout the country from this Committee that the brewers are responsible for the gravity of the beer which is brewed to-day. It is not the brewers who are responsible, but the Food Controller, and we brew it as we are told, and have no option to brew it either stronger or weaker. An hon. Member suggested that the tax ought to be borne by the trade itself, but that is too absurd for words. There would not be a brewery open to-morrow if it had to bear the tax. The Chancellor wants to get his revenue, and I am here to assist him to get it, but I say there is not a brewery which would be open to-morrow if this tax was not allowed to be passed on. Take my own case. I signed a check myself yesterday for £27,800 for the Chancellor of the Exchequer, for less barrels of beer than I signed a cheque in pre-War days for £1,700 for, but I am finding no fault. I only say it is impossible to have asked the trade to stand out of their own profits for the whole of this tax, and I do not think the Chancellor of the Exchequer would expect them to do so, because I am certain that in my own case, for instance, in two or three months' time, the whole of the profits we have ever made would be taken by this extra tax. I simply make my point in fairness to the trade.

Captain W. BENN: A very interesting sidelight on the change of opinion in this Committee has been provided by the Debate we have had to-day. It seems to me an amazing thing that the House of Commons appears almost unanimous in
standing up for the consumption of beer, at a time when our great trade rival over the water has decided to go dry. This tax will have an effect on the consumption of alcohol, and I say, although I do not suppose it will be a popular thing in the House, it is a very serious thing continually to ignore the commercial threat at the supremacy of this country which is involved in the United States going dry.

The CHAIRMAN: That opens up a large question. We might Debate that for a week. It is not relevant to this Bill.

Captain BENN: I was simply dealing with the effect of the tax on the consumption of alcohol in this country, but I will not pursue that, after your ruling. It certainly deserves the serious consideration of the Commitee. This time yesterday we attempted to get a reduction in the tea duty, and the women of this country are taking note of these things. All those hon. Gentlemen who have risen to-day to protest against the tax on beer were absolutely silent when there was a protest against the tax on tea.

Question put, "That the Clause stand part of the Bill."

The Commitee divided: Ayes, 232; Noes, 71.

Division No. 185.]
AYES.
[4.31 p.m.


Adair, Rear-Admiral Thomas B. S.
Dawes, Commander
Law, Alfred J. (Rochdale)


Addison, Rt. Hon. Dr. C.
Dean, Lieut.-Commander P. T.
Law, Rt. Hon. A. B. (Glasgow,. C.)


Adkins, Sir W. Ryland D.
Denniss, Edmund R. B. (Oldham)
Lewis, Rt. Hon. J. H. (Univ., Wales)


Allen, Lieut.-Colonel William James
Doyle, N. Grattan
Lewis, T. A.(Glam., Pontypridd)


Asquith, Rt. Hon. Herbert Henry
Duncannon, Viscount
Lister, Sir R. Ashton


Astor, Viscountess
Edge, Captain William
Lloyd, George Butler


Bagley, Captain E. Ashton
Edwards, Major J. (Aberavon)
Locker-Lampson, G. (Wood Green)


Baird, Sir John Lawrence
Elliot, Capt. Walter E. (Lanark)
Locker-Lampson, Com. O. (H'tlngd'n)


Baldwin, Rt. Hon. Stanley
Eyres-Monsell, Commander B. M.
Lansdale, James Rolston


Balfour, George (Hampstead)
Falcon, Captain Michael
Lyle, C. E. Leonard


Banbury, Rt. Hon. Sir Frederick G.
Falle, Major Sir Bertram G.
Macdonald, Rt. Hon. John Murray


Barnes, Major H. (Newcastle, E.)
Farquharson, Major A. C.
M'Guffin, Samuel


Barnston, Major Harry
Fell, Sir Arthur
McLaren, Robert (Lanark, Northern)


Benn, Sir A. S. (Plymouth, Drake)
Forestier-Walker, L.
M'Lean, Lieut.-Col. Charles W. W.


Benn, Capt. Sir I. H., Bart.(Gr'nw'h)
Forrest, Walter
Maclean, Rt. Hn. Sir D. (Midlothian)


Benn, Captain Wedgwood (Leith)
Foxcroft, Captain Charles Talbot
M'Micking, Major Gilbert


Bennett, Thomas Jewell
Fraser, Major Sir Keith
Macnamara, Rt. Hon. Dr. T. J.


Bethell, Sir John Henry
Galbraith, Samuel
McNeill, Ronald (Kent, Canterbury)


Birchall, Major J. Dearman
Gange, E. Stanley
Macpherson, Rt. Hon. James I.


Bird, Sir A. (Wolverhampton, West)
Gardiner, James
Mallaby-Deeley, Harry


Blades, Capt. Sir George Rowland
Gardner, Ernest
Mallalieu, F. W.


Blake, Sir Francis Douglas
Geddes, Rt. Hon. Sir E. (Camb'dge)
Marriott, John Arthur Ransome


Borwick, Major G. O.
Gibbs, Colonel George Abraham
Mildmay, Colonel Rt. Hon. F. B.


Boscawen, Rt. Hon. Sir A. Griffith-
Gilmour, Lieut.-Colonel John
Mond, Rt. Hon. Sir Alfred M.


Bowyer, Captain G. E. W.
Glanville, Harold James
Moore, Major-General Sir Newton J.


Breese, Major Charles E.
Glyn, Major Ralph
Moreing, Captain Algernon H.


Briggs, Harold
Goff, Sir R. Park
Morris, Richard


Brown, Captain D. C.
Graham, W. (Edinburgh, Central)
Morrison-Bell, Major A. C.


Bruton, Sir James
Grant, James A.
Mosley, Oswald


Buchanan, Lieut.-Colonel A. L. H.
Greenwood, William (Stockport)
Mount, William Arthur


Buckley, Lieut.-Colonel A.
Greig, Colonel James William
Murray, C. D. (Edinburgh)


Burdon, Colonel Rowland
Guinness, Lieut.-Col. Hon. W. E.
Murray, Dr. D.(Inverness & Ross)


Burn, Col. C. R. (Devon, Torquay)
Hacking, Captain Douglas H.
Murray, John(Leeds, West)


Butcher, Sir John George
Harmsworth, Sir R. L. (Caithness)
Murray, Major William (Dumfries)


Campbell, J. D. G.
Haslam, Lewis
Neal, Arthur


Campion, Lieut.-Colonel W. R.
Henderson, Major V. L. (Tradeston)
Newbould, Alfred Ernest


Carr, W. Theodore
Henry, Denis S. (Londonderry, S.)
Newman, Colonel J. R. P. (Finchley)


Carson, Rt. Hon. Sir Edward H.
Hills, Major John Waller
Newman, Sir R. H. S. D. L. (Exeter)


Casey, T. W.
Hinds, John
Norman, Major Rt. Hon. Sir Henry


Cautley, Henry S.
Holmes, J. Stanley
Norris, Colonel Sir Henry G.


Cecil, Rt. Hon. Lord R. (Hitchin)
Hood, Joseph
Oman, Sir Charles William C.


Chamberlain, Rt. Hn. J. A.(Birm.,W.)
Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)
O'Neill, Major Hon. Robert W. H.


Child, Brigadier-General Sir Hill
Hopkins, John W. W.
Palmer, Major Godfrey Mark


Clay, Lieut.-Colonel H. H. Spender
Hopkinson, A. (Lancaster, Moseley)
Palmer, Brigadier-General G. L.


Clough, Robert
Howard, Major S. G.
Pearce, Sir William


Cockerill, Brigadier-General G. K.
Hunter, General Sir A. (Lancaster)
Peel, Col. Hon. S. (Uxbridge, Mddx.)


Colfax, Major Wm. Phillips
Hurd, Percy A.
Philipps, Gen. Sir I.(Southampton)


Collins, Col. Sir G. P. (Greenock)
Jackson, Lieut.-Colonel Hon. F. S.
Philipps, Sir Owen C. (Chester, City)


Colvin, Brig.-General Richard Beale
Jephcott, A. R.
Pinkham, Lieut.-Colonel Charles


Coote, Colin Reith (Isle of Ely)
Jellett, William Morgan
Pownall, Lieut.-Colonel Assheton


Coote, William (Tyrone, South)
Johnstone, Joseph
Pratt, John William


Cowan, Sir H. (Aberdeen and Kinc.)
Jones, Henry Haydn (Merioneth)
Prescott, Major W. H.


Craig, Colonel Sir J. (Down, Mid)
Jones, J. T. (Carmarthen, Llanelly)
Pulley, Charles Thornton


Craik, Rt. Hon. Sir Henry
Joynson-Hicks, Sir William
Purchase, H. G.


Curzon, Commander Viscount
Kellaway, Rt. Hon. Fredk. George
Rae, H. Norman


Davies, Thomas (Cirencester)
Lambert, Rt. Hon. George
Raffan, Peter Wilson


Davison, Sir W. H. (Kensington, S.)
Lane-Fox, G. R.
Randles, Sir John S.


Raper, A. Baldwin
Sugden, W. H.
Williams, Col. Sir R. (Dorset, W.)


Rees, Sir J. D. (Nottingham, East)
Surtees, Brigadier-General H. C.
Williamson, Rt. Hon. Sir Archibald


Rees, Capt. J. Tudor- (Barnstaple)
Sutherland, Sir William
Willoughby, Lieut.-Col. Hon. Claud


Remer, J. R.
Talbot, G. A. (Hemel Hempstead)
Wills, Lieut.-Colonel Sir Gilbert


Renwick, George
Taylor, J.
Wilson, Capt. A. S. (Holderness)


Roberts, Sir S. (Sheffield, Ecclesall)
Thomas, Sir Robert J. (Wrexham)
Wilson, Daniel M. (Down, West)


Robinson, S. (Brecon and Radnor)
Thorne, G. R. (Wolverhampton, E.)
Wilson, Rt. Hon. J. W. (Stourbridge)


Robinson, Sir T. (Lancs., Stretford)
Tickler, Thomas George
Wilson, Colonel Leslie O. (Reading)


Rodger, A. K.
Townley, Maximilian G.
Wilson-Fox, Henry


Samuel, A. M. (Surrey, Farnham)
Tryon, Major George Clement
Wood, Hon. Edward F. L. (Ripon)


Samuel, Rt. Hon. Sir H. (Norwood)
Turton, E. R.
Wood, Sir J. (Stalybridge & Hyde)


Scott, A. M. (Glasgow, Bridgeton)
Wallace, J.
Wood, Major S. Hill- (High Peak)


Seely, Major-General Rt. Hon. John
Walton, J. (York, W. R., Don Valley)
Woolcock, William James U.


Shaw, William T. (Forfar)
Ward, Col. J. (Stoke-upon-Trent)
Yate, Colonel Charles Edward


Shortt, Rt. Hon. E. (N'castle-on-T.)
Waring, Major Walter
Yeo, Sir Alfred William


Sprot, Colonel Sir Alexander
Warren, Lieut.-Col. Sir Alfred H.
Young, Lieut.-Com. E. H. (Norwich)


Stanley, Lieut.-Colonel Hon. G. F.
Weston, Colonel John W.
Young, Sir Frederick W. (Swindon)


Starkey, Captain John R.
Wheler, Lieut.-Colonel C. H.
Young, Robert(Lancaster, Newton)


Stephenson, Colonel H. K.
White, Lieut.-Col. G. D. (Southport)
Young, W. (Perth & Kinross, Perth)


Stewart, Gershom
Williams, Aneurin (Durham, Consett)



Sturrock, J. Leng
Williams, Lt.-Com. C. (Tavistock)
TELLERS FOR THE AYES.—




Lord E. Talbot and Mr. Parker.


NOES.


Agg-Gardner, Sir James Tynte
Guest, J. (York, W. R., Hemsworth)
Preston, W. R.


Ashley, Colonel Wilfrid W.
Hall, F. (York, W. R., Normanton)
Remnant, Sir James


Atkey, A. R.
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)
Rendall, Athelstan


Bell, James (Lancaster, Ormskirk)
Hambro, Captain Angus Valdemar
Richardson, R. (Houghton-le-Spring)


Bell, Lieut.-Col. W. C. H. (Devizes)
Hayday, Arthur
Roberts, Frederick O. (W. Bromwich)


Bellairs, Commander Carlyon W.
Hirst, G. H.
Robertson, John


Bigland, Alfred
Hodge, Rt. Hon. John
Roundell, Colonel R. F.


Boyd-Carpenter, Major A.
Irving, Dan
Royce, William Stapleton


Bramsdon, Sir Thomas
James, Lieut.-Colonel Hon. Cuthbert
Rutherford, Colonel Sir J. (Darwen)


Brittain, Sir Harry
Jodrell, Neville Paul
Sexton, James


Bromfield, William
Kenyon, Barnet
Shaw, Thomas (Preston)


Brown, James (Ayr and Bute)
Kidd, James
Short, Alfred (Wednesbury)


Carter, R. A. D. (Man., Withington)
Lawson, John J.
Sitch, Charles H.


Clynes, Rt. Hon. J. R.
Lunn, William
Steel, Major S. Strang


Cohen, Major J. Brunel
Maclean, Nell (Glasgow, Govan)
Strauss, Edward Anthony


Croft, Lieut.-Colonel Henry Page
Malone, Major P. B. (Tottenham, S.)
Swan, J. E.


Davies, A. (Lancaster, Clitheroe)
Matthews, David
Tootill, Robert


Dennis, J. W. (Birmingham, Deritend)
Murchison, C. K.
Waterson, A. E.


Dewhurst, Lieut.-Commander Harry
Myers, Thomas
Wedgwood, Colonel J. C.


Foreman, Henry
Nicholson, William G. (Petersfield)
Wigan, Brig.-Gen. John Tyson


Ganzoni, Captain Francis John C.
Nield, Sir Herbert
Wignall, James


Green, Joseph F. (Leicester, W.)
O'Grady, Captain James



Griffiths, T. (Monmouth, Pontypool)
Ormsby-Gore, Captain Hon. W.
TELLERS FOR THE NOES.—


Gritten, W. G. Howard
Palmer, Charles Frederick (Wrekin)
Colonel Gretton and Mr. Blair.


Grundy, T. W.
Perkins, Walter Frank

CLAUSE 7.—(Increased Duties on Wine.)

(1) In lieu of the duties of customs payable on wine imported into Great Britain and Ireland, there shall, as from the twentieth day of April nineteen hundred and twenty, be charged, levied and paid, subject as hereinafter provided, the following duties (that is to say):—



£
s.
d.


Wine—


Not exceeding 30 degrees of proof spirit, the gallon
0
2
6


Exceeding 30 but not exceeding 42 degrees of proof spirit, the gallon
0
6
0


And for every degree, or fraction of a degree, beyond the highest above charged, an additional duty the gallon
0
0
6


Sparking wine in bottle, an additional duty, the gallon
0
5
0


Still wine in bottle, an additional duty, the gallon
0
2
0


and in the case of sparkling wine in addition to the above duties a duty equal to fifty per cent. of the value of the wine.

(2) This Section shall have effect subject to the provisions of Section eight of the
Finance Act, 1919, and as though the Second Schedule to that Act provided that the preferential rate of duty as respects the ad valorem duty on sparkling wine were two-thirds of the full rate of that duty.

(3) Sub-section (2) of Section eight of the Customs and Inland Revenue Act, 1890, (which provides that wine rendered sparkling in warehouse is to be deemed to be sparkling wine for the purpose of a certain duty imposed on sparkling wine), shall apply for the purpose of the ad valorem duty imposed on sparkling wine by this Section as it applies for the purpose of any other duty imposed on such wine.

(4) In this Section the word "wine" includes the lees of wine.

The following Amendment stood on the Order Paper in the names of Mr. LYLE and Earl WINTERTON:

In Sub-section (1), after the word "provided" ["as hereinafter provided"], insert the words "save on wines supplied on prescription in hospitals."

The CHAIRMAN: I think this matter was dealt with yesterday on Amendments to Clause 4.

Rear-Admiral ADAIR: I beg to move, in Sub-section
(1), to leave out the words "Sparkling wine in bottle, an additional duty, the gallon…. 5s.
I have three Amendments on this Clause, and I would submit that it would facilitate progress if you allowed me to deal with the three simultaneously.

The CHAIRMAN: Yes, I think it would be convenient. I understand that the hon. and gallant Member's point is contained in the three Amendments, and, therefore, if he moves the first, we will take the discussion on all three together.

Rear-Admiral ADAIR: The collective result of these three Amendments is to put sparkling wine on exactly the same footing as any other wine. The Clause provides that all the taxes on wines of every sort are doubled this year. But, in addition, on the sparkling wine there is put on an ad valorem duty of 50 per cent. That means an enormous handicap on the sparkling wine. I would like to say very definitely and at the outset that I am not putting forward these Amendments on behalf of the consumers, or on behalf of the wine merchants of this country. I am all for taxing luxury, and those who provide it, but my concern is for the people who produce these wines, the people of France, and particularly those of the Champagne districts. Throughout the War the whole of the French vineyards suffered from want of man-power, but, in addition to that, the Champagne district of Rheims and other Champagne districts suffered enormously from the devastation due to the warfare carried over them. In fact, I am informed that at the present moment there is scarcely one-third of the Champagne vineyards productive. I would ask, if that be so, is this the time for us to put such a heavy handicap on champagne? Should we not rather help these people to recover that prosperity which has been lost to such a large extent in the War? We ought to encourage them, as I propose to do, by actually diminishing the taxation on champagne and other wines. The effect of such a reduction as I propose of the taxation per gallon in wines in bottle is this: whereas last year the
taxation was 2s. 6d. per gallon on champagne, it will be, if my Amendment is carried, only 2s. this year. I do that by way of encouragement to these devastated districts.
The champagne industry has been very seriously prejudiced in other ways. The United States of America, one of the largest markets for it, has gone dry. Russia, which was also a very large market has gone red, and, I presume, will not hereafter drink champagne. [An HON. MEMBER: "It has gone dry, too."] All the more reason then for their not having champagne there. Germany has more or less gone to ruin. There remains only ourselves as the great market for champagne, except, perhaps South America. We are proposing to put on such prohibitive taxation as will, I feel sure, enormously reduce the consumption of champagne in this country. In my opinion it means death to the champagne industry, and that is my principle reason for putting forward these Amendments. This may sound rather sentimental, but it is more than that. France owes us a very large sum of money. If we do not facilitate her regaining her prosperity we shall be the losers. I think that is a practical reason for encouraging, if possible, the great stable industry of wine production. There are other reasons altogether apart from the sentimental ones. These prohibitive duties will so reduce the consumption that they will really defeat their own ends.
Secondly, the ad valorem duty is, I think, distinctly a bad one. The enormous consumption of champagne which has taken place since the Armistice is no guide whatever to what is likely to take place this year or in the future. At the end of the War people in this country, in the fulness of their hearts, lavished money on champagne and liquers and so forth. Thousands of young soldiers came back from France with their pockets full, many of them with money the like of which they had never known before. They did not know how to spend their money. They spent it in a prodigal manner on champagne, treating their friends and so on. Then, too, there was the general election. One effect of it was that the cellars of the House of Commons were depleted. The upshot of this enormous consumption was that the enormous stocks could
not be replaced, and prices went up. We have come to this stage now that with the new duties of which the Chancellor tells us, the price of a good bottle of champagne will be 35s. or 40s. I think that is the figure the Chancellor of the Exchequer gave us. No person with any decent regard to private economy is going to pay a couple of pounds for a bottle of champagne. Anyhow, that is my opinion. He should rather buy Exchequer bonds. I am glad to say that the City companies are setting an example in this matter. One of them actually notifies in the press that at their entertainments in future champagne will be banned. There goes one source of revenue.
At public dinners it is disappearing—[HON. MEMBERS: "It is" and laughter]—but not in the manner at which hon. Members are hinting. We had a dinner the other night at a club with which I am connected where before the War we always drank champagne. There were 160 of us dining, and no champagne was drunk at all. As to the consumption in private houses, I feel quite sure that there are very few people who are drinking champagne to anything like the same extent as they did in pre-War days. The outcome of all that is that there is an enormous reduction in the drinking of these wines. I am assured that it has been as much, since the beginning of this year, as 33 to 50 per cent. in some of the bigger restaurants. I do not know whether the Chancellor thinks there will be a fall in the price of champagne and that the consumption may be kept up by that apart from the new taxes. But in all these large restaurants where they charge such enormous prices, and presumably make large profits on champagne, they are absolutely bound to do so to pay their enormous on-costs. It is only by their profits on wine that they are able to pay their on-costs and pay any dividend on their capital. The outcome of the additional taxation will simply mean that the prices at restaurants will go still further, and there will be a still further reduction in consumption.
Any ad valorem duty, I think, is bad, and that is my objection to it. As to the increase on the duty on sparkling wines I should be glad to know from the Chancellor of the Exchequer how he proposes to assess the value. Is it to be
done by an actual drinking test or is it to be by invoice value? If, it be by a drinking test, it means setting up additional Custom House officers and experts in champagne, at very high salaries. There are many Members of the House who are aware that the tea merchants in China have their tea tasters, and these men are paid very highly. In the old days these tea tasters used to be great "swells" in China. It will be absolutely necessary, if we are going to assess the value of champagne by taste, to have a similar class of men employed in assessing the value of champagne, at very high salaries—if they are to be in use. That means an increase in the taxes of the country, and in that respect it is objectionable. Further, it would undoubtedly lead to any amount of friction between the Government officials and the importing wine merchants. If the right hon. Gentleman is going to use the invoice value, I think it is opening the way to fraud. I am not imputing dishonesty to the wine merchants generally, but I think it must be obvious to any business man in this House that there may be fraud, and that fraud in this case would be very easy to perpetrate. The revenue would be defrauded, and the dishonest merchants would probably be able to underseell the honest merchants. If the Chancellor is going to proceed now to an ad valorem duty, I invite him to consider, rather the substitution of a flat rate per case of wine. This will mean no testing, no invoice value, no additional staff, and no possibility of fraud. I should like the right hon. Gentleman to give this matter his serious consideration, and in making his reply I shall be glad if he will refer to it.
Finally I do not wish the Chancellor to think that I am against the taxation of luxuries, or that I am with those who waste their money and squander it on luxurious living and mere amusements. Far from it. I am all for the taxation of that class of people. I desire to encourage that by two new Clauses which I propose, and which hon. Members will find on the Order Paper. I am all for the taxation of luxuries, but I want it to be done in such a way as not to hurt our friends. I am suggesting taxation on luxurious meals and additional taxation on mere amusements. This will not hurt our friends, and will hit much more
effectively those who obviously can afford to help to pay these duties to the country.

5.0 P.M.

Mr. CHAMBERLAIN: Perhaps it will be convenient if I speak at once and inform the Committee, with your permission, Mr. Whitley, of the course which I am prepared to suggest to the House. But before I come to that I should like to make one or two general observations arising out of the speech of my hon. and gallant Friend. It would have been impossible for the Government to have proposed the additional large increase in the duties on beer and whisky, the cheaper and more generally drunk alcoholic beverages, and to have left untouched the wine duties, particularly the duties on sparkling wines, which would bear no sort of suitable proportion to the cost of the article and the money expended on it. We therefore felt bound in connection with our other Budget proposals to suggest this increase in the wine duties. When a heavy duty on a commodity is proposed, which commodity varies enormously in value, a mere flat rate tax is always open to criticism. It has been my fortune or misfortune to listen to a great number of Budget Debates, and I think there has never been a Budget Debate in which some hon. Member has not suggested that it is unfair that all tea should pay the same duty irrespective of the price charged for it. I have scarcely listened to a Budget Debate where the same kind of criticism was not passed upon the Tobacco Duty. When I came to propose a large increase in the Wine Duties, I felt that to increase in the same proportion the rates on sparkling and still wines was a proposition which I could not justify. Even amongst sparkling wines there are such differences in value that a flat rate of increase would be unjust to the cheaper wines. A flat rate would be most inadequate to the more expensive wines and would be oppressive to the cheapest kind, which can only exact the lowest price. That is the reason why I propose a further differentiation between sparkling wines and still wines, and why I propose an ad valorem duty on sparkling wines.
My hon. and gallant Friend is afraid that we shall have great difficulty in assessing an ad valorem duty. That argument used to be urged from both
sides of the House, but during the War we imposed ad valorem duties, and those duties have been administered without friction with singular success and with comparative ease. If a trader under those duties is aggrieved by the assessment made by the Revenue authorities he has a right of appeal. It is true that the number of duties is very small, but the number of different articles which have to be assessed within the scope of those duties is very considerable. If it were impossible to assess an ad valorem duty equitably and with satisfaction to the trade the number of appeals of aggrieved parties would have been considerable. They have not been considerable, in fact there has not been one single appeal. I think the test of the pudding is in the eating, and that shows that these duties have been a success.
In the great majority of cases the evidence which the importer produces will be accepted without trouble to him or the Customs Authorities. Where the Customs have reason to suppose from a comparison with the returns made by other importers or from any other cause that the returns are not accurate, the importer will be challenged and shown up, where they are fraudulent or do not represent the real total. That, however, will be a very small minority of cases, and in cases where an expert is required he will be at the service of the Customs to give the opinion which he is technically qualified to express. My hon. and gallant Friend says that these wines cannot bear this tax. Is he quite certain of that? Is he certain that there is not room for further taxation without curtailing the consumption of wine? We all know that the cost of any particular wine bears no relation which is measurable by us to the cost of the same wine when we find it on the list of a restaurant. Assume that the restaurant has to put on an additional profit, which is not always the case, because they are wholesale buyers, assume they have to pay an additional profit, will the difference between the cost of the wine to us and the cost to him be accounted for by the additional profit or by the additional profit which the restaurant or hotel puts on all the commodities he sells to make his own profit? In other words, the restaurant taxes wine, and especially sparkling wines and champagnes, to meet a large proportion of their expenses and
profits and they make a profit out of all proportion to what is put on the food prices by general tariffs. Is the restaurant to be allowed to tax the wine and the representatives of the public to be prohibited?
I think it is quite possible that restaurant keepers will have to revise their practice and charge a little more for the food or other accommodation, and not tax their wines quite so heavily with charges that have no relation to the cost of the wine to them. If the restaurants and hotels are not afraid of losing their wine custom, there is room for a readjustment of the prices which, by lightening the taxation which they put upon the wine, may enable them to lower prices and meet the demand of their customers for a less expensive article. A friend of mine told me that he bought in France, from an hotel or restaurant, some wine. He bought it through friends living in France, and it cost him 11s. 6d. per bottle. It was champagne. It was not one of the best brands, but he invited me to taste it, and it was a very good wine. I satisfied myself that it was an article that I should not be ashamed to offer to people who accepted my hospitality. My friend went into a restaurant in London, and he found the same wine listed at 27s. 6d. or 28s. 6d., and he thought that confirmed his judgment as to the sound character of the wine, and he tried to get some more. He was told, however, that he could not have any more. The hotel or restaurant in France where he bought the wine must have paid the profit required by the merchant, and, in addition, they must have charged my friend with a profit satisfactory to themselves, but they could not sell him any more, because they had ascertained that the wine which they had previously sold him had been shipped to England, and they were not allowed to sell it at that price to the English market, although they could sell at that price to the French market. This means that not merely in public places is a tax put on wine for the private profit of the caterer, but that in France a tax is put upon champagne by the exaction of a greater profit if the sale is in England.
Why should there be all these disastrous consequences which have been predicted in the champagne trade? I say that in the case of champagne there is a sufficient margin of profit, and the prices charged
whether sold as in the transaction, for the history of which I am indebted to my friend, or as sold in public restaurants, there is a margin which makes me feel pretty safe in suggesting that those wines can bear a heavier, and ought to bear a heavier taxation than they have yet contributed to the revenue of the country. Having said so much, I desire at this stage to inform the Committee that in consequence of information which we have obtained since I made my Budget statement, I must correct the Budget anticipation. For the purposes of the Budget statement and the preparation of the Budget, the Board of Customs had nothing to go upon but the average value declared by importers. The information since received shows that that was too high a value and contained elements which were of no consequence at that moment except statistically, but which could not properly be included in the values subject to the ad valorem tax. Various items were included which would not be included in ad valorem tax levied upon the wine as imported. Therefore, instead of the average value of the imported wine being as estimated on the information before me, 57s. 6d. per gallon, it appears that the average value on which duty would be charged would probably not exceed 40s. per gallon, instead of the basis of my estimate taken when I introduced the tax. The Committee will see at once that there is a very great difference between the amount realised by a 50 per cent. duty on an article valued at 40s., and one valued at 57s. 6d., and I placed the value per bottle and per gallon too high.
My hon. and gallant Friend has made another appeal, an appeal which has been made by other hon. Members more than once during the earlier stages of this Debate, and that is that His Majesty's Government in this matter should have regard to the feelings of the greatest of our Allies, and especially to the condition of the ravaged territory of France, or of that portion which is included in the wine-growing district. I yield to no one, I hope, in admiration of France, in sympathy with her, and in affection for her, and I should be very sorry if I personally, or a Government of which I am a Member, should be thought insensible to her sufferings or unwilling to do the most we can to facilitate her
recovery. I have, therefore, reconsidered the position. As I say, owing to a miscalculation, inevitable perhaps, and at any rate excusable, the tax will not produce what was anticipated. In deference to the appeal made, even more than to any anticipation of real damage that the tax might do, I venture to suggest to the Committee that, instead of levying this ad valorem duty at the rate of 50 per cent., we should reduce it to 33⅓ per cent. If that proposal find approval in the Committee, I shall be glad to move an Amendment to that effect.

Sir G. YOUNGER: Does the righ hon. Gentleman propose to charge the ad valorem duty on the net value of the champagne delivered here, or on its wholesale value as landed here?

Mr. CHAMBERLAIN: On the c.i.f. value landed here. With the permission of the Chair and of the Committee, I think it would be for the general convenience if I explain another point. The Bill as drawn gives two moments at which the value may be ascertained. It says the value shall be ascertained at the moment the duty is paid, it may be over the ship's side, or when the wine is withdrawn from bond. For reasons which I need not stop to argue at this stage, I am quite prepared to do what I believe will be agreeable to the trade in respect both of wine and of cigars, and charge the duty only when the wine or cigars are withdrawn from bond, the charge to be always at the c.i.f. value as landed.

Sir F. BANBURY: I am very glad my right hon. Friend has made some concession. I wish it could have been a little larger. Will he kindly inform me how much he expects now to receive from the duty?

Mr. CHAMBERLAIN: The error in miscalculation to which I have already referred would reduce the yield on the basis of a 50 per cent. ad valorem duty to £1,150,000 for the current year and £1,200,000 for a full year. The yield on the 33⅓ per cent. basis is estimated at £750,000 for the current year and £800,000 for the full year.

Sir F. BANBURY: No doubt if these Estimates are realised the right hon. Gentleman will next year consider whether or not he can further reduce the
duty. I am sorry that the Parliamentary Secretary and the Minister of Transport have left the Committee, because I was going to call attention to a statement made by the right hon. Gentleman as to the price at which champagne was charged and to the extent to which it ought to be reduced. I wanted to call the attention of the Parliamentary Secretary to the Ministry of Transport to the statement of his chief a few days ago in which he took great credit to himself for blaming the railway companies for making reasonable charges for champagne, and in which he suggested that those charges ought to be very largely increased. My right hon. Friend the Chancellor of the Exchequer, for whom I have the greatest respect, suggests that they charge too much. The Minister of Transport takes another view. What am I to do? I can only hope that an arrangement will be come to between the Chancellor of the Exchequer and the Minister of Transport whereby a reasonable amount shall be allowed as that which railway companies shall charge to consumers of champagne.

Lieut.-Commander KENWORTHY: I want to reinforce what the right hon. Baronet has said. I, too, hope that next year there will be a still further reduction in this duty. I may surprise some of my hon. Friends by what I am going to say. In imposing these duties on sparkling wines we are taxing wines which stand in a class by themselves, really exquisite wines. Sparkling wines, both red and white, are in a class by themselves and are drunk by people who drink nothing else, or rather by people who drink very little indeed, and when they do drink take this class of wine. I am not one of them, but I speak for them, and I say that to pick out sparkling wines and put this extremely heavy tax upon them, for even a 33⅓ per cent. duty will be very high, is, I think, contrary to the best traditions of taxation in this country. This is what will happen. The rich profiteer will still go on buying champagne. He is one of the class who cannot properly appreciate it. No doubt he will buy the special brand of champagne which the right hon. Gentleman told us he understood had been specially manufactured for the new class of champagne drinkers. The very fact that this brand is expensive will attract them. There are poorer classes who like to drink champagne. There are
those who take it for medicinal purposes. There are the great mass of the middle and lower middle classes who open bottles of champagne on the occasion of weddings, christenings, and so on. They are going to be hit very hard by this additional duty. The profiteer does not care for this champagne tax. He will only charge a little more for the necessities of life in which he is profiteering. You are going to still hit another class. The people in the mining villages of Yorkshire drink champagne. [HON. MEMBERS: "Oh, oh!"] I suppose I know my own native valley pretty well. The pits are very deep there. A man puts in two or three days' work at a time. When he comes up he finds his home beautifully clean, and always at his first meal, after a very hard time below, he opens a bottle of champagne. I hope hon. Members really are not going to suggest that if a miner can afford to open a bottle of champagne when he comes up from below ground he is not just as much entitled to do so, and even more entitled to do so, than people who never did a day's work in their lives. I am going to reinforce what the right hon. Baronet has said. I do not often agree with him, but I do not see why these really exquisite wines, which are in a class by themselves, should be specially picked out for taxation to the hurt of poor people who take them rather as a luxury and to whom as a result these wines will, I am afraid, become forbidden luxuries. I hope the right hon. Gentleman will consider that.

Mr. RONALD McNEILL: When this Bill was debated on the Second Reading I ventured to ask my right hon. Friend if he would not consider the possibility of making a concession on this Clause. I am very glad, indeed, he has seen his way to do it. I think it most important that the public outside, and in fact the world at large, should realise the reason for which the Government is making this concession, and why it will be accepted, if it be accepted, by the House of Commons. I was very much struck by what my right hon. Friend said. In fact, I think we must all have thought at the time when extra taxation was being put on the cheaper forms of beverage, that it was impossible, from any point of view of equity, to refrain from putting additional taxation on the more expensive drinks. If we had to consider this
merely as an internal question from the point of view of taxation, I do not believe that any hon. Member of this House would have quarrelled with the proposals made by the right hon. Gentleman in his Budget. This concession, however, has been made by the Government, and, I hope, will be made by the House of Commons, as a mark of our sympathy and affection for our Ally, France, which is the nation producing this subject of taxation. If my right hon. Friend had not announced that concession, I had it in mind to say a few words in support of my hon. and gallant Friend's Amendment, and to point out that it seemed to me, in the circumstances, impossible that any concession should be made unless it were with the whole-hearted approval and support of the Labour party. I think it would have been a graceful act if the Leader of the Labour party had seen his way to make a request, on behalf of our French Allies, that this concession should be made. I do not know what attitude hon. Gentlemen opposite are going to take up, but I think it would have been graceful and to their honour if they had helped to show in a conspicuous way the desire of this country, at such a time as this, to do anything in its power to assist our French Allies in their recovery. If the House accept the proposal which my right hon. Friend is going to make, and if the Labour party join in approving of it, I hope the reasons for it will not be left in any doubt, but will be proclaimed as conspicuously as possible.

General Sir IVOR PHILIPPS: I am sorry I cannot join in thanking the Chancellor of the Exchequer for what he is pleased to call a concession in this matter. If I had come into the House knowing nothing about this question the right hon. Gentleman's able speech in favour of the Bill as it stands would have satisfied me that the proposal contained in the Bill was a sound one. He has shown us very clearly and eloquently that the restaurant-keeper charges a heavy price, and he very pertinently asks, why should not the State get some of this? He gave an eloquent example of the case of a friend who stood him a drink—a very cheap drink, apparently—and who paid the full duty for that drink.

Mr. CHAMBERLAIN: The old duty.

Sir IVOR PHILIPPS: The right hon. Gentleman also told us how that particular consignment of which he had a part was only what I may call a sample, because, the moment the French exporters heard of this small consignment coming to the Chancellor of the Exchequer's friend, they immediately put their foot down and said, "No more champagne cheap for the Englishman; we are going to keep the price up." That is profiteering with a vengeance, and by the people whom we are asked to-day to support. I never heard any more scandalous suggestion in my life than that this country should hesitate to put a proper tax on champagne in proportion to that on beer and whisky because it is suggested that the French people will in some way benefit. The French people will not benefit. There is no question of the French grower benefiting at all. The Chancellor of the Exchequer has definitely shown us by examples within his own practical experience that the profit will go either to the French exporter or to the English middleman. Then he comes forward, having made such a good case, with an entirely different proposal, and surrenders some £400,000 to these people. He has proved to the House conclusively, and, to my mind, very satisfactorily, that the whole of that £400,000 would go into the hands of the profiteers in France and in this country. He says we are doing this out of kindness to the French Republic, but I call that an absurd proposition to put before this House. We want this money. We are always asking for things that we want done in this country, and yet we are going to surrender £400,000 to the French exporters and English importers, without a penny of advantage to the country as far as I can see. They will not let us have cheaper champagne. The right hon. Gentleman had a bottle cheap, but no one else will. How can it be shown that this is in any way benefiting the people of this country? My hon. and gallant Friend behind me (Lieut.-Commander Kenworthy) said that the Labour party were benefiting by this. I do not see the Labour party present in force to support the proposed reduction. I think they will agree that, if there are those amongst Labour who enjoy the luxury of champagne, they should pay their tax like anybody else. I am not going to argue whether the Labour
party always drink champagne or not. My experience is that they do not, and if they do they ought to pay the tax. I am sorry to hear that the Chancellor of the Exchequer has made this surrender, and I think he has given us sufficient proof that he ought to withdraw his own proposals.

Mr. PALMER: I should like in a word to try and stiffen the back, for once, of the Chancellor of the Exchequer. If there be one class of the community who ought to pay through the nose for their luxuries it is that of the champagne drinkers. I agree with the hon. and gallant Member who has just sat down that the right hon. Gentleman has shown that this is not merely a concession to the sentiment of the French people. If it were, then, even though it cost £500,000, I should be ready to see that money spent to show to our French Allies how much we value their friendship, and how determined we are in every way to show our feelings of cordial sentiment towards them. It is certain, however, that this money is going, not to the grower of the wine, but to the profiteer, who to-day is battening on every luxury of the British people. I know something about the price of champagne to-day, because I sometimes associate with gentlemen who drink it—not Members of the Labour party, but other gentlemen. The price of champagne to-day is scandalous, and nothing will be done to alter it by the kind of concession which the right hon. Gentleman intimates that he is going to make. The tax on the working man's beer ought to be reduced, because beer is an essential of the people; but champagne is not necessary. It is a luxury, and such a luxury that the man who wants it can well afford to pay for it. If you were to ask any restaurateur to-day he would tell you that, in spite of the increase in price, they are selling just as much as they did six, nine, or 12 months ago. I beg the right hon. Gentleman for once to be firm, and not to make any concession. Let us go for this 50 per cent. ad valorem, and show that, while we should be perfectly ready to do anything to demonstrate our real and abiding friendship for our French Allies, we think that this is a ridiculous concession, which will do no good to anyone who deserves to have it.

Mr. HODGE: I desire to associate myself with those who are opposed to the
reduction in the tax which the Chancellor of the Exchequer has suggested. Having regard to the fact that the tax on tea has been increased year after year, why should the luxury drinkers of champagne not pay this tax, which, even as contained in the Finance Bill originally, is not proportionate to the excessive duties which have been put upon beer and whisky? When the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) suggests that miners, when they come up from the pit, open bottles of champagne and drink it, he is talking sheer and utter nonsense. The miner's wage would not permit it. Perhaps the hon. and gallant Gentleman has been supplying some of them with it himself. I would ask the Chancellor of the Exchequer to stick by his original proposal, and, at any rate as far as the Labour party are concerned, we shall certainly vote against the proposed reduction.

Mr. MYERS: I should not have risen had it not been for the speech of the hon. and gallant Member for Central Hull. I hope no one will endeavour to defend the reduction of this tax on the ground that it will injure the miners of Yorkshire. I live in Yorkshire, and am fairly well acquainted with the mining area, and it is a calumny on the mining population to say that they habitually consume champagne. I say in all seriousness that, if one visited the restaurants or public houses in the mining districts, one would find more places of call where champagne was not to be found on the premises than places where it is obtainable. As a matter of fact, it is not a profitable commodity for the inn-keeper or publican to keep by him. Here and there, perhaps, a couple of miners may "crack" a bottle of champagne, say, over the result of a football match, or the St. Leger, or something of that sort; but to say that it is "habitually consumed" by the mining population of Yorkshire does not represent the true facts of the case. I hope the Chancellor of the Exchequer will stand by his original proposal. He told us, if I remember rightly, in his Budget speech, that the wine duties had not been touched since 1899, and that during that period the upward tendency of taxation upon other alcoholic beverages had been progressive. Further, I think we ought to realise that the importation of French, Spanish and Portuguese wines in 1919 was treble what it was in 1913, and
that the increase in the importation of champagne last year was 300,000 gallons above the quantity imported in 1913. Obviously there is a consuming public for this commodity, and it is not a working-class beverage, as the hon. and gallant Member would lead us to believe. I agree that it is a question of the consumer having to pay. The consumer has to pay in these cases every time, but this is a case where the consumers can afford to pay, and I am prepared to let them do so.

Rear-Admiral ADAIR: In view of the concession which the Chancellor of the Exchequer has proposed, I shall be glad to withdraw this Amendment and also the other two in the same Sub-section which stand in my name. I should like to say, however, that I hope it will be thoroughly realised why he has made this concession. His reason is my great and principal reason, namely, consideration for the French people, whose livelihood depends on the production of this wine.

Amendment, by leave, withdrawn.

Mr. CHAMBERLAIN: I beg to move, in Sub-section (1), to leave out the word "fifty" ["a duty equal to fifty per cent. of the value of the wine"], and to insert instead thereof the words "thirty-three and one-third."
I desire to add one word to what I have said before, with special reference to the remarks of the hon. and gallant Geutleman opposite (General Sir I. Philipps). He says that this is no concession to France, but I have reason to think that it is concession which will be much appreciated by the French people. We have received a most considerate representation from M. Millerand on behalf of Rheims and the Rheims district, not asking, of course, for this particular concession, but asking us to reconsider the situation and see whether, with justice to our own people, we could not alleviate what his constituents felt to be the hardship to France. It is in deference to that very friendly appeal, and in the same spirit in which it is made, that I have suggested this concession. I should not like it to go out, and it ought not to go out, that France will be ungrateful for this. I have every reason to believe that the concession, and the reason for it, will be appreciated in France.

Sir R. COOPER: I personally felt very strongly opposed to the reduction which
the right hon. Gentleman suggested a few months ago, but I think the statement he has just made must be accepted in all good faith, as he must obviously know very much better than any ordinary Member can, to how far this proposed reduction really will benefit the French nation. My difficulty is this. I know that the best wines which are bought by the retailers in this country, the restaurant keepers and so on, are bought at 20s. or less per bottle, and yet we have to pay 40s. or 42s. or thereabouts for a bottle of champagne in the principal restaurants. I cannot see how, if the right hon. Gentleman had maintained the previous tax, the French nation would have suffered by it. It seems to me that the tax would inevitably be paid by those who are charging such exorbitant prices in this country. But in view of what he has said, I am satisfied, and I shall support him.

Sir IVOR PHILIPPS: In view of the statement of the Chancellor of the Exchequer, I feel that some of my remarks ought to be qualified, because there is no one who is more anxious to do everything in his power to maintain the friendly alliance with France, after both countries have suffered so much together, and therefore I feel that it puts us in a very difficult position. I think we are put in a still more difficult position by the fact that the right hon. Gentleman has shown the British public that, however much this concession may be to the sentiment of the French nation, and I think we should do all we can to sympathise with them in that matter as well as in hard cash, France will not benefit financially by it, and it is purely a matter of sentiment. Our difficulty is that we are giving up hard cash to benefit the sentiments of another nation with which we all sympathise, but that we are suffering in hard cash. The money will not go into the Treasury, and it will not go into the other country's Treasury. He showed us that quite conclusively. But in view of what he has just said about friendly working through such strenuous years with France, which I hope will be continued for many years to come, I shall certainly not oppose the reduction.

Mr. MARRIOTT: I should like to say one word of very cordial congratulation to the Chancellor of the Exchequer on the concession which he has made, and I hope
his words will go out from the House to our allies in France and will be accepted by them in the spirit in which they were uttered. I believe he has been, from the international point of view, exceedingly wise in making this concession in the graceful terms which he has employed. My hon. and gallant Friend opposite has another point. He said it would be a loss to the Exchequer. On that point I rather take leave to disagree with him. I am not at all certain that, quite apart from the sentimental point of view, the point which is appealing to the House and which has been accepted by the House, from the purely revenue point of view he has not been exceedingly well advised in making the reduction. For, as far as I am able to judge—I speak neither as a producer nor to any other than a very insignificant extent as a consumer of champagne—I am very much inclined to believe that we have reached the point at which it would be inadvisable to impose further taxation on this commodity. I have made careful inquiries, and I have come very deliberately to the conclusion that that point, if not actually reached, will be reached very soon. I understand my right hon. Friend (Sir E. Geddes) has also made inquiries on this point in regard to some of the hotels with which he is indirectly connected. I have made inquiries in the same quarters and from the replies I have received I have formed the very deliberate conclusion that a distinct check has already been imposed by the proposed tax on the consumption of this commodity. Therefore, both on the sentimental ground and from the point of view of the production of revenue, I believe the Chancellor of the Exchequer is very warmly to be congratulated on the concession he has made.

Mr. PALMER: As I spoke rather strongly on this question, perhaps I may be allowed to say I am perfectly convinced by the right hon. Gentleman's statement. I am so tremendously impressed with the need of showing our solid and deep affection for our French ally, that even if it cost me a little money, I think that cost is well spent in maintaining the bond of sentiment and affection which we have for France to-day. After the right hon. Gentleman's statement, I shall most cordially support the reduction.

Captain W. BENN: I wish to say why I intend to record my vote against the reduction. I believe a duty of this kind falls on the consumer, and whole I associate myself very warmly with what has been said about our feelings towards France, which are of the warmest description, I do not think this represents any money to the French producer but a relief to the English consumer; and, while I entirely agree as to our feelings towards France, it is a great pity that

the right hon. Gentleman has selected this particular tax to relieve the consumer of this article, and shown such a very stiff upper lip when we have asked for a reduction of other duties on articles, the consumers of which are not in the same position as the consumers of these wines.

Question put, "That the word 'fifty' stand part of the Clause."

The Committee divided: Ayes, 90; Noes, 261.

Division No. 186.]
AYES.
[5.53 p.m.


Allen, Lieut.-Colonel William James
Guest, J. (York, W. R., Hemsworth)
Rees, Sir J. D. (Nottingham, East)


Astor, Viscountess
Hall, F. (York, W. R., Normanton)
Richardson, R. (Houghton-le-Spring)


Atkey, A. R.
Hambro, Captain Angus Valdemar
Robertson, John


Barnes, Major H. (Newcastle, E.)
Hayday, Arthur
Robinson, S. (Brecon and Radnor)


Barton, Sir William (Oldham)
Henderson, Major V. L. (Tradeston)
Rodger, A. K.


Bell, James (Lancaster, Ormskirk)
Hinds, John
Royce, William Stapleton


Benn, Com. Sir I. H., Bart. (Gr'nw'h)
Hirst, G. H.
Sexton, James


Benn, Captain Wedgwood (Leith)
Holmes, J. Stanley
Shaw, Thomas (Preston)


Blair, Reginald
Hopkinson, A. (Lancaster, Mossley)
Short, Alfred (Wednesbury)


Bramsdon, Sir Thomas
Irving, Dan
Sitch, Charles H.


Breese, Major Charles E.
Jones, Henry Haydn (Merioneth)
Smith, W. R. (Wellingborough)


Broad, Thomas Tucker
Kenyon, Barnet
Spoor, B. C.


Bromfield, William
Law, Alfred J. (Rochdale)
Strauss, Edward Anthony


Brown, James (Ayr and Bute)
Lawson, John J.
Swan, J. E.


Burn, T. H. (Belfast, St. Anne's)
Lister, Sir R. Ashton
Sykes, Sir Charles (Huddersfield)


Clay, Lieut.-Colonel H. H. Spender
Lunn, William
Thomas, Brig.-Gen. Sir O. (Anglesey)


Clynes, Rt. Hon. J. R.
M'Guffin, Samuel
Thomson, T. (Middlesbrough, West)


Coote, William (Tyrone, South)
McLaren, Robert (Lanark, Northern)
Thorne, G. R. (Wolverhampton, E.)


Cowan, D. M. (Scottish Universities)
Maclean, Neil (Glasgow, Govan)
Tootill, Robert


Davidson, Major-General Sir J. H.
Maclean, Rt. Hn. Sir D. (Midlothian)
Ward-Jackson, Major C. L.


Davies, A. (Lancaster, Clitheroe)
M'Micking, Major Gilbert
Ward, Col. J. (Stoke-upon-Trent)


Davies, Major D. (Montgomery)
Mosley, Oswald
Wedgwood, Colonel J. C.


Dennis, J. W. (Birmingham, Deritend)
Murray, Lieut.-Colonel A. (Aberdeen)
White, Charles F. (Derby, Western)


Donald, Thompson
Murray, Dr. D. (Inverness & Ross)
Wignall, James


Foxcroft, Captain Charles Talbot
Murray, John (Leeds, West)
Willey, Lieut.-Colonel F. V.


Galbraith, Samuel
Newbould, Alfred Ernest
Williams, Aneurin (Durham, Consett)


Gardiner, James
Newman, Sir R. H. S. D. L. (Exeter)
Yate, Colonel Charles Edward


Glanville, Harold James
Norman, Major Rt. Hon. Sir Henry
Young, Robert (Lancaster, Newton)


Graham, W. (Edinburgh, Central)
Ormsby-Gore, Captain Hon. W.



Griffiths, T. (Monmouth, Pontypool)
Parry, Lieut.-Colonel Thomas Henry
TELLERS FOR THE AYES.—


Grundy, T. W.
Raffan, Peter Wilson
Mr. Hodge and Mr. Myers.


NOES.


Adair, Rear-Admiral Thomas B. S.
Buchanan, Lieut.-Colonel A. L. H.
Craik, Rt. Hon. Sir Henry


Agg-Gardner, Sir James Tynte
Buckley, Lieut.-Colonel A.
Curzon, Commander Viscount


Bagley, Captain E. Ashton
Bull, Rt. Hon. Sir William James
Dalziel, Sir D. (Lambeth, Brixton)


Baird, Sir John Lawrence
Burdon, Colonel Rowland
Davies, Thomas (Cirencester)


Baldwin, Rt. Hon. Stanley
Burdett-Coutts, William
Davies, Sir William H. (Bristol, S.)


Balfour, George (Hampstead)
Burgoyne, Lieut.-Colonel A. H.
Davison, Sir W. H. (Kensington, S.)


Banbury, Rt. Hon. Sir Frederick G.
Burn, Col. C. R. (Devon, Torquay)
Dawes, Commander


Banner, Sir John S. Harmood-
Butcher, Sir John George
Dean, Lieut.-Commander P. T.


Barnes, Rt. Hon. G. (Glas., Gorbals)
Campbell, J. D. G.
Denison-Pender, John C.


Barnston, Major Harry
Carr, W. Theodore
Denniss, Edmund R. B. (Oldham)


Barrand, A. R.
Carson, Rt. Hon. Sir Edward H.
Doyle, N. Grattan


Beauchamp, Sir Edward
Carter, R. A. D. (Man., Withington)
Duncannon, Viscount


Bell, Lieut.-Col. W. C. H. (Devizes)
Casey, T. W.
Du Pre, Colonel William Baring


Bennett, Thomas Jewell
Cautley, Henry S.
Edge, Captain William


Bigland, Alfred
Cayzer, Major Herbert Robin
Elliot, Capt. Walter E.(Lanark)


Birchall, Major J. Dearman
Cecil, Rt. Hon. Evelyn (Birm., Aston)
Eyres-Monsell, Commander B. M.


Bird, Sir A. (Wolverhampton, West)
Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Falcon, Captain Michael


Blades, Capt. Sir George Rowland
Chamberlain, Rt. Hn. J. A. (Birm. W.)
Falle, Major Sir Bertram G.


Blake, Sir Francis Douglas
Chamberlain, N. (Birm., Ladywood)
Farquharson, Major A. C.


Boles, Lieut.-Colonel D. F.
Child, Brigadier-General Sir Hill
Fell, Sir Arthur


Borwick, Major G. O.
Clough, Robert
FitzRoy, Captain Hon. E. A.


Boscawen, Rt. Hon. Sir A. Griffith-
Coates, Major Sir Edward F.
Foreman, Henry


Bowerman, Rt. Hon. Charles W.
Coats, Sir Stuart
Forestier-Walker, L.


Bowles, Colonel H. F.
Cockerill, Brigadier-General G. K.
Forrest, Walter


Bowyer, Captain G. E. W.
Colfox, Major Wm. Phillips
Fraser, Major Sir Keith


Boyd-Carpenter, Major A.
Collins, Col. Sir G. P. (Greenock)
Gange, E. Stanley


Bridgeman, William Clive
Colvin, Brig.-General Richard Beale
Ganzoni, Captain Francis John C.


Briggs, Harold
Cooper, Sir Richard Ashmole
Gardner, Ernest


Brittain, Sir Harry
Coote, Colin Reith (Isle of Ely)
Geddes, Rt. Hon. Sir E. (Camb'dge)


Bruton, Sir James
Craig, Colonel Sir J. (Down, Mid)
Gibbs, Colonel George Abraham


Gilmour, Lieut.-Colonel John
Mallaileu, F. W.
Rutherford, Sir W. W. (Edge Hill)


Gould, James C.
Malone, Major P. B. (Tottenham, S.)
Samuel, A. M.(Surrey, Farnham)


Grant, James A.
Marriott, John Arthur Ransome
Samuel, Rt. Hon. Sir H. (Norwood)


Green, Joseph F. (Leicester, W.)
Martin, Captain A. E.
Samuel, Samuel (W'dsworth, Putney)


Greene, Lt.-Col. Sir W. (Hack'y, N.)
Matthews, David
Sanders, Colonel Sir Robert A.


Greer, Harry
Middlebrook, Sir William
Scott, A. M. (Glasgow, Bridgeton)


Greig, Colonel James William
Mildmay, Colonel Rt. Hon. F. B.
Shaw, William T. (Forfar)


Gretton, Colonel John
Mitchell, William Lane
Shortt, Rt. Hon. E. (N'castle-on-T.)


Gritten, W. G. Howard
Molson, Major John Elsdale
Simm, M. T.


Guinness, Lieut.-Col. Hon. W. E.
Montagu, Rt. Hon. E. S.
Smith, Harold (Warrington)


Hacking, Captain Douglas H.
Moore, Major-General Sir Newton J.
Sprot, Colonel Sir Alexander


Hall, Lieut.-Col. Sir F. (Dulwich)
Moreing, Captain Algernon H.
Stanier, Captain Sir Beville


Hanson, Sir Charles Augustin
Morrison, Hugh
Stanley, Lieut.-Colonel Hon. G. F.


Haslam, Lewis
Morrison-Bell, Major A. C.
Starkey, Captain John R.


Henry, Denis S. (Londonderry, S.)
Mount, William Arthur
Steel, Major S. Strang


Herbert, Hon. A. (Somerset, Yeovll)
Murchison, C. K.
Stewart, Gershom


Hewart, Rt. Hon. Sir Gordon
Murray, Lieut.-Colonel A. (Aberdeen)
Sturrock, J. Leng


Hills, Major John Waller
Nall, Major Joseph
Sugden, W. H.


Hoare, Lieut.-Colonel Sir S. J. G.
Neal, Arthur
Surtees, Brigadier-General H. C.


Hood, Joseph
Newman, Colonel J. R. P. (Finchley)
Sutherland, Sir William


Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Nicholson, William G.(Petersfield)
Talbot, G. A. (Hemel Hempstead)


Hopkins, John W. W.
Nield, Sir Herbert
Taylor, J.


Horne, Sir R. S. (Glasgow, Hillhead)
Norris, Colonel Sir Henry G.
Terrell, George (Wilts, Chippenham)


Hotchkin, Captain Stafford Vere
O'Neill, Major Hon. Robert W. H.
Thomas, Sir Robert J. (Wrexham)


Howard, Major S. G.
Palmer, Charles Frederick (Wrekin)
Thorpe, Captain John Henry


Hunter, General Sir A. (Lancaster)
Palmer, Major Godfrey Mark
Tickler, Thomas George


Hurd, Percy A.
Palmer, Brigadier-General G. L.
Townley, Maximilian G.


Illingworth, Rt. Hon. A. H.
Parker, James
Tryon, Major George Clement


Inskip, Thomas Walker H.
Pearce, Sir William
Turton, E. R.


Jackson, Lieut.-Colonel Hon. F. S.
Pease, Rt. Hon. Herbert Pike
Waddington, R.


James, Lieut.-Colonel Hon. Cuthbert
Peel, Col. Hon. S. (Uxbridge, Mddx.)
Walton, J. (York, W. R., Don Valley)


Jephcott, A. R.
Perkins, Walter Frank
Warren, Lieut.-Col. Sir Alfred H.


Jellett, William Morgan
Philipps, Sir Owen C. (Chester, City)
Weston, Colonel John W.


Jenson, C.
Pickering, Lieut.-Colonel Emil W.
Wheler, Lieut.-Colonel C. H.


Jodrell, Neville Paul
Pliditch, Sir Philip
White, Lieut.-Col. G. D. (Southport)


Johnstone, Joseph
Pinkham, Lieut.-Colonel Charles
Whitla, Sir William


Jones, Sir Evan (Pembroke)
Pollock, Sir Ernest M.
Williams, Lt.-Com. C. (Tavistock)


Jones, J. T. (Carmarthen, Llanelly)
Pownall, Lieut.-Colonel Assheton
Willoughby, Lieut.-Col. Hon. Claud


Joynson-Hicks, Sir William
Pratt, John William
Wills, Lieut.-Colonel Sir Gilbert


Kellaway, Rt. Hon. Fredk. George
Preston, W. R.
Wilson, Capt. A. S.(Holderness)


Kidd, James
Prescott, Major W. H.
Wilson, Daniel M. (Down, West)


Kiley, James D.
Pulley, Charles Thornton
Wilson, Col. Leslie(Reading)


Kinloch-Cooke, Sir Clement
Purchase, H. G.
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Lambert, Rt. Hon. George
Rae, H. Norman
Wilson-Fox, Henry


Law, Rt. Hon. A. B. (Glasgow, C.)
Randles, Sir John S.
Wood, Hon. Edward F. L. (Ripon)


Lewis, Rt. Hon. J. H. (Univ., Wales)
Raper, A. Baldwin
Wood, Sir H. K. (Woolwich, West)


Lloyd, George Butler
Raw, Lieutenant-Colonel N.
Wood, Sir J.(Stalybridge & Hyde)


Locker-Lampson, G. (Wood Green)
Rees, Sir J. D. (Nottingham, East)
Wood, Major S. Hill- (High Peak)


Locker-Lampson, Com. O. (H'tlngd'n)
Rees, Capt. J. Tudor- (Barnstaple)
Woolcock, William James U.


Long, Rt. Hon. Walter
Reid, D. D.
Yeo, Sir Alfred William


Lorden, John William
Remer, J. R.
Young, Lieut.-Com. E. H. (Norwich)


Lyle, C. E. Leonard
Remnant, Sir James
Young, Sir Frederick W. (Swindon)


Macdonald, Rt. Hon. John Murray
Rendall, Athelstan
Young, W. (Perth & Kinross, Perth)


Mackinder, Sir H. J. (Camlachie)
Renwick, George
Younger, Sir George


Macmaster, Donald
Roberts, Sir S. (Sheffield, Ecciesall)



Macnamara, Rt. Hon. Dr. T. J.
Robinson, Sir T. (Lancs., Stretford)
TELLERS FOR THE NOES.—


McNeill, Ronald (Kent, Canterbury)
Roundell, Colonel R. F.
Lord E. Talbot and Mr. Dudley


Macpherson, Rt. Hon. James I.
Royden, Sir Thomas
Ward.


Maddocks, Henry
Rutherford, Colonel Sir J. (Darwen)



Question, "That the words 'thirty-three and one-third,' be there inserted," put, and agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 8.—(Additional duty on cigars.)

In addition to the duties of customs payable on tobacco imported into Great Britain and Ireland, there shall, as from the twentieth day of April nineteen hundred and twenty, be charged, levied, and paid on cigars a duty of fifty per cent. of the value of the cigars:
Provided that in the case of the duty charged by this Section the preferential rate under Section eight of the Finance Act, 1919, shall be two-thirds of the full rate.

Mr. HOOD: I beg to move to leave out the word "fifty" ["duty of fifty per cent"] and to insert instead thereof the word "twenty."
The duty at present levied on tobacco is 8s. 2d. per lb. on the leaf tobacco imported and 15s. 7d. upon the imported manufactured tobacco—the cigar. The Chancellor of the Exchequer proposes a further ad valorem, duty of 50 per cent. on the imported cigar. That means that as between the British manufacturer who brings in his tobacco at a duty of 8s. 2d. per pound and the manufacturer abroad who imports at 15s. 7d., and if this Clause is passed will import at something like 30s. 7d. per pound, a very important descrimination in favour of the British cigar manufacturer.
In future the tax on the imported cigar instead of being 3d. per cigar will amount to about 10½d. In response to a request that I made to the Chancellor of the Exchequer on the Second Reading, he was kind enough to see a deputation of the importers of cigars; very reputable firms who have been in the trade for many years and who almost entirely devote themselves to the cigar trade. Their submissions to the Chancellor of the Exchequer were that there will be a very large reduction in the sale of cigars in future in consequence of this duty, that the effect will be that instead of the Chancellor of the Exchequer benefiting by the increased duty, he will get no more than if the duty is not increased; that the effect so far as their business is concerned will be that they will be unable to carry on because they will be unable to make any profit, and that they will be seriously financially embarrassed if this duty is thrust upon them. The Chancellor of the Exchequer listened very carefully to the deputation and I hope that their views have made a favourable impression on him and that he will be able to announce some concession.

Mr. CHAMBERLAIN: I am in some doubt how to treat this matter, and I should like to have further time for consideration if the Committee allow me. I will tell the Committee frankly the position. There has been the same kind of misunderstanding through a miscalculation, for exactly the same reason, in regard to the effect of this tax as there was in regard to the effect of the champagne tax. That is to say, that the value habitually given to the Customs for statistical purposes proved not to be the real value upon which the duty would be levied. Whereas in the case of champagne the values declared were higher than the real tax and, therefore, the actual 50 per cent. ad valorem duty would have been a smaller tax than I had anticipated; in this case the values declared are lower than the real tax and, therefore, 50 per cent. ad valorem would be a higher tax and bring in more money than I had supposed. According to the best calculation that we can make the 33⅓ ad valorem duty on the true value of the cigar would produce as much money as I anticipated would be received from the 50 per cent. ad valorem duty on the basis of values which were inadequate Therefore, for a different reason from that which actuated me in the case of the
champagne duty, I feel that there is a case to be made out for a reduction of this duty. I am a little concerned lest with the high values which I find to be the true values a 50 per cent. ad valorem would be too high a duty for the trade to stand, and would result in a loss rather than in a gain. I came to the House not prepared to accept the Amendment of my hon. Friend, but favourably inclined towards a proposal to make the ad valorem duty in the case of cigars 33⅓ per cent.; but I have been rather shaken by the result of my last concession. The Committee did not receive it in an altogether friendly spirit, and instead of my being taken to task for being obstinate and obdurate I was accused of lacking backbone. That does not encourage one to make further concessions. I am rather doubtful as to what would be the wise course to pursue in this case, and I should like a little more time to consider the matter.

Mr. PALMER: I should like to make an appeal to the Chancellor of the Exchequer with respect to cigars in bond. There is a tremendous amount of cigars in bond. Owing to circumstances arising from war cigar merchants have not taken their cigars from bond, and I think we should be making a genuine and proper concession if the Chancellor of the Exchequer would consider adopting a lower ad valorem duty in regard to the stock now in bond. I am sure his attitude is perfectly sympathetic. There is a large trade which is depending very much upon his decision, and I feel sure he does not want to kill the goose which lays the golden egg or put any embargo on the industry which might interfere with the real course of trade. I thank him on behalf of those for whom I speak in taking further time for mature thought, and I hope he will consider whether in regard to the cigars actually in bond he could make a concession different from the concession in regard to the Budget generally.

Sir WATSON RUTHERFORD: I want to make a few observations upon the ad valorem tax. As one who has had more years' experience in smoking cigars than one cares to remember, and who has had to buy cigars from all parts of the world, it has been a matter for reflection that the best cigars in the world were always to be got in London, and, in spite of the duty being higher, as it was before the
War, than anywhere else in the world, you could get the best cigars in the world in London, and upon the best terms. The curious thing about it was that it left me with a problem to solve, but that problem is not very difficult to solve, and I hope that the Chancellor of the Exchequer and those who are considering the imposition of a further duty upon cigars will be good enough to bear in mind what the true solution of the problem is. It is this, that if you put a duty of so much a pound upon imported cigars, supposing it is 15s. now or 30s., as it is to be, the effect of any such duty will put a stop to the supply of rubbish. If a cigar is only worth 10s. a pound to start with it cannot stand a duty of 30s. or 15s. a pound; but material that is worth 100s. to start with can easily stand that duty. When the duty was raised to 15s. it was not worth while paying that taxation on poor stuff, and it will not be worth while paying increased duty now upon each pound of imported rubbish, and we shall continue to get the best cigars in the world. But if you have a system of making it ad valorem you are immediately opening the market to rubbish. It is a curious problem, but I state it as a fact, and I challenge anyone to deny it, that before the War under the old taxation of so much a pound, which was higher in England than anywhere else in the world, you could get the best cigars in the world on the best terms. By altering that form of duty to ad valorem duty you are running the risk of reversing the position and flooding the British market with rubbish I hope that this consideration, which has not occurred to anybody who has not had the necessity and opportunity of trying to buy first-class cigars in most countries of the world, as I have had, will not be lost sight of.

Sir R. COOPER: The right hon. Gentleman is making a great mistake in making concessions on these particular proposals, because there is a prevalent feeling in the country, which I certainly share, that the Government has got a bigger task than it cares to recognise in raising the amount necessary to meet the actual expenses which are being incurred, and we already realise there are other points in this Bill which are to be brought forward in Debate as to which it is going to be shown that heavy taxation is going to be
accompanied by a great injury to our national prosperity from the point of view of the people as a whole. If we are going to raise the money necessary to meet the ever-increasing expenses of the Government we have got to tax luxuries of every description and to tax them as high as they can stand. Like the hon. Member for Liverpool (Sir W. Rutherford) I am a considerable smoker of cigar, and I like the best, but people who want luxuries like champagne and cigars ought to be made to pay a very high duty and make a heavy contribution to the Exchequer. The right hon. Gentleman took the point of view that if he was not careful he might be unduly hitting the trade. I maintain that if he did that it is going to be for the national good. If he is going to stop people spending large amounts on champagne, cigars and luxuries of that sort the money will be saved or will be used in other directions which will be useful to the country. We have got to aim at raising the largest possible amount we can in those directions, and it is the duty of the Government to frame their Finance Bill in such a way as to compel people to stop this enormous expenditure on un-necessaries and luxuries, and when the right hon. Gentleman suggests that he will reduce this tax he suggests a step which he would himself regret later on, and I hope that it will not be taken.

Sir F. BANBURY: The hon. Gentleman who has just sat down is apparently very anxious that larger taxation should be imposed. I would suggest that the proper method of dealing with the situation is that expenditure should be reduced. Does the right hon. Gentleman propose between now and Report stage to consider whether it is possible to make this concession? If that is so, I suppose it is understood that he will not reduce the duty so that it will produce less than he had intended that it should produce?

Mr. CHAMBERLAIN: Yes. I ask the Committee to give me time between now and Report further to consider the matter. The lowest that I should be prepared to say is 33⅓ per cent. to produce approximately the same revenue as I had anticipated would be received from the 50 per cent. When I ask for time for consideration, of course, that means that I have not made up my mind. My hon. Friend must not take me as in any sense pledged to make that concession or any concession
at all. Frankly, I want to weigh the various facts of the case.

Sir F. BANBURY: I rose because that consideration weighed with a great number of us in the last Division.

Sir I. PHILIPPS: I am very glad to hear that the Chancellor of the Exchequer will not accept this Amendment to-day. I hope that, on further consideration, he will stick to his Bill. If there is to be any concession in the matter of tobacco, I hope that he will make it on the tobacco smoked by the great mass of the people. I do not like to see him come down to this House and surrender all those taxes on luxuries. This is the second time to-day he has threatened that. There are one or two taxes in the Budget which we think damaging to the trade of the country, and those we shall press him to alter, but these are taxes on luxuries, which we welcome. But since then somebody has been getting at him. I had to give way not to vote against his proposal in the last case, but if he had not been able to make that appeal, there is a very large number of Members who would not have supported him. Here is another case. He is not going to accept the proposal to change 50 into 20, but he does threaten the House that he is going to be weak-kneed in the matter, and give way from 50 per cent. to 33⅓ per cent. The taxes of this country are bearing very heavily on the poor man, and no proposal is put forward in the Finance Bill to reduce the taxes on the poor man. The proposals, so far, have been to reduce the taxes on the rich man. I am not prepared to support the Government in that policy. Two things we demand—that he should uphold the taxes on luxuries, and increase them if necessary. He will get the support of the Liberal party.

Mr. KENNEDY JONES: Is it worth it?

Sir I. PHILIPPS: I am a supporter of the Government, and always have been. The Chancellor of the Exchequer knows that quite well. But there is a Liberal party in the Coalition Government as well as a Conservative party, and I speak for many of those Liberals who are just as keen supporters of the Government as any of the Conservative Members and Liberal Members, who want to take the taxes off those articles that are paid for by the great mass of the people and put them on to those who can well afford to pay.
The right hon. Gentleman did that in the Budget as he brought it in, and we all cheered him. He is gradually giving away everything. He is taking taxes off champagne and is reducing his proposals on cigars. Where are the proposals to reduce the taxes imposed on beer or tea?

The CHAIRMAN: We must not go into, a general discussion in Committee. We must deal with one thing at a time.

Sir I. PHILIPPS: I apologise, and conclude by saying that I hope the Chancellor of the Exchequer will not give way in this matter.

Lieut.-Colonel Sir F. HALL: I am very glad to hear that the Chancellor of the Exchequer has tentatively decided to make some alterations. The reason which he gave is perfectly fair. A mistake was made in calculating the revenue. He finds that the values upon which he made his calculation were lower than the actual values. He was budgetting for a certain amount, and finds that he will probably get it by making a smaller demand on these people who are in the habit of smoking what are called these luxurious cigars. You can go to a certain point in taxation, but after that you reach breaking point, and if you go to such enormous taxation, it is not a business proposition. Not only are you not going to get anything like the amount for which, you budget, but you are not going to get anything like the amount which was obtained heretofore. It is all very well to say that this is a concession to the rich man, and that there is no concession to the man who drinks beer and smokes his "baccy." We have all got to bear a reasonable proportion of the taxation. My hon. and gallant Friend (Sir J. Phillips) will remember this when he gets his demand for Income Tax and Supertax. He will not say then that the rich man has not been called, and rightly called, upon to bear his fair share of the taxation of the country. We are all prepared to do so, but do not let us lose our heads and say that you are only taxing one class of man against the other. I am pleased that my right hon. Friend is coming to a reasonable idea with regard to some of these taxes. I hope that this is only a small portion of the favours which we shall receive later on in the Budget, and many of us have hopes that we shall have assistance given to the
country as a whole when we come to other matters a little later on.

Mr. RICHARDSON: I utterly fail to follow the remarks of the right hon. Gentleman when he tells us that he made a miscalculation as to the duty, and for that reason he is reducing it still further. I am more than surprised at some of the arguments for a reduction of this tax. Not a word has been said as to the tax levied on the worker as against the tax levied on the man who can well afford it. Taxation must be levied according to ability to pay. It is not a question of how much you pay, but how much have you left over after paying with which to get the wherewithal to live. That is the position as we see it. I trust that the Chancellor of the Exchequer is going to stick to his Budget, and if he has anything to give away in relief of taxation, that he should turn to the things that are absolutely essential for bringing up an A1 people in an Al nation. The taxation borne by the workers is increasing by leaps and bounds, and here the people who can afford to pay have relief. I was surprised to hear the Member for Hull remark that miners in Yorkshire have drunk champagne, and was delighted to hear it, and if I live long enough perhaps I shall hear that the miners in Durham smoke these luxurious cigars. As regards this Budget, it is going to be said in the country that this is a rich man's Budget from top to bottom.

Captain BENN: I was not quite clear from the statement of the Chancellor of the Exchequer, as to what consideration weighed with him in regard to the interval between now and the Report stage. What we would like to be assured about is that he will have regard only to the revenue produced by the duty. If he thinks a smaller rate of duty will produce the same revenue, and that that is the most which can be raised by the duty, I shall be satisfied, but we do feel strongly on this side of the House, that this is not the moment to reduce the duty on an article of luxury of this kind.

Mr. HOOD: Having regard to the promise of the Chancellor of the Exchequer to consider this between now and Report, I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. HOLMES: I beg to move, to leave out the words
Provided that in the case of the duty charged by this Section the preferential rate under Section Eight of the Finance Act, 1919, shall be two-thirds of the full rate.
It is not necessary to give the reasons why those on this side of the House object to a preferential rate on this or any other class of commodity. Of all cases, this is surely one where a preferential rate means a loss to the revenue, and nothing else. The man who smokes Havana cigars is not going to be driven by a lower preferential rate and a cheaper price to the smoking of cigars for which he does not care. No additional British-grown cigar will be sold, and no additional foreign cigar will be kept out of the country as a result of this preference. Another point in regard to this is, that the Chancellor of the Exchequer has taken the opportunity of improving the preferential rate to the Colonies on cigars. Last year it was five-sixths of the full rate, and he is now making it two-thirds of the full rate. So that gradually the preference to the Colonies is being increased. Those who are in favour of Imperial Preference are entitled to be gratified, but we, who are against preferential rates altogether, protest against it.

Mr. CHAMBERLAIN: The reason for making the Preference two-thirds is that it has been made two-thirds in the case of all the other ad valorem duties. I do not propose to argue the principle again. As far as this House is concerned and as far as this Government is concerned, we are pledged as a Government to Imperial Preference. We were elected on that pledge and we stand by it.

Captain W. BENN: In supporting my hon. Friend and his Amendment, I would like to draw the attention of the Chancellor of the Exchequer to an answer he gave to a question put by an hon. Member on this side of the House on 24th June. The import of cigars at a non-preferential rate is largely increasing. So that there really is not anything in it from the point of view of assisting the producer of cigars within the Empire. Moreover, the figures the right hon. Gentleman gave on the same day, relating to the amount of duty collected at full and preferential rates, showed that as far as tobacco is concerned—the whole of tobacco, which, I presume, includes cigars—the amounts were,
respectively, £35,421,000 and £884,000. You are not encouraging trade in cigars within the Empire, but are introducing an irritating and unnecessary interference with free commercial intercourse and no doubt complicating the working of this tax and adding something to the work of administration.

Lieut.-Commander KENWORTHY: I find the arguments of the Chancellor of the Exchequer rather extraordinary. He apparently referred us to the Debate of last year on Imperial Preference. This is the first Amendment raising the question of preference on this Bill. I do not wish to raise the matter by a frontal attack on the Government, but I do take exception to the Chancellor of the Exchequer adopting the view that the situation has not changed since last year. It

has. Since last year we have added considerably to the area of the Empire. We have also been subject to great criticisms—

The CHAIRMAN: To develop that line of argument would not be relevant.

Lieut.-Commander KENWORTHY: I hope that when the main defence of Preference is made by the Chancellor of the Exchequer—and I am sure he will make it most ably and eloquently—he will not lose sight of the fact that the situation has changed very considerably since last year.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 284; Noes, 65.

Division No. 187.]
AYES.
[6.38 p.m.


Adair, Rear-Admiral Thomas B. S.
Chamberlain, N. (Birm., Ladywood)
Hall, Lieut.-Col. Sir F. (Dulwich)


Agg-Gardner, Sir James Tynte
Child, Brigadier-General Sir Hill
Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)


Allen, Lieut.-Colonel William James
Clough, Robert
Hambro, Captain Angus Valdemar


Astbury, Lieut.-Commander F. W.
Coates, Major Sir Edward F.
Hanson, Sir Charles Augustin


Atkey, A. R.
Coats, Sir Stuart
Haslam, Lewis


Bagley, Captain E. Ashton
Cockerill, Brigadier-General G. K.
Henderson, Major V. L. (Tradeston)


Baird, Sir John Lawrence
Colfox, Major Wm. Phillips
Henry, Denis S. (Londonderry, S.)


Baldwin, Rt. Hon. Stanley
Colvin, Brig.-General Richard Beale
Herbert, Hon. A. (Somerset, Yeovil)


Balfour, George (Hampstead)
Cooper, Sir Richard Ashmole
Herbert, Dennis (Hertford, Watford)


Balfour, Sir R. (Glasgow, Partick)
Coote, Colin Reith (Isle of Ely)
Hewart, Rt. Hon. Sir Gordon


Banbury, Rt. Hon. Sir Frederick G.
Coote, William (Tyrone, South)
Higham, Charles Frederick


Banner, Sir John S. Harmood-
Craig, Captain C. C. (Antrim, South)
Hills, Major John Waller


Barnes, Rt. Hon. G. (Glas., Gorbals)
Craig, Colonel Sir J. (Down, Mid)
Hoare, Lieut.-Colonel Sir S. J. G.


Barnston, Major Harry
Craik, Rt. Hon. Sir Henry
Hohler, Gerald Fitzroy


Barrand, A. R.
Curzon, Commander Viscount
Hood, Joseph


Beauchamp, Sir Edward
Dalziel, Sir D. (Lambeth, Brixton)
Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)


Bell, Lieut.-Col. W. C. H. (Devizes)
Davidson, Major-General Sir J. H.
Hope, James F. (Sheffield, Central)


Benn, Capt. Sir I. H., Bart.(Gr'nw'h)
Davies, Thomas (Cirencester)
Hopkins, John W. W.


Bennett, Thomas Jewell
Dawes, Commander
Horne, Sir R. S. (Glasgow, Hillhead)


Betterton, Henry B.
Dean, Lieut.-Commander P. T.
Hotchkin, Captain Stafford Vere


Bigland, Alfred
Dennis, J. W. (Birmingham, Deritend)
Howard, Major S. G.


Birchall, Major J. Dearman
Doyle, N. Grattan
Hunter, General Sir A.(Lancaster)


Bird, Sir A. (Wolverhampton, West)
Duncannon, Viscount
Hurd, Percy A.


Blades, Capt. Sir George Rowland
Du Pre, Colonel William Baring
Illingworth, Rt. Hon. A. H.


Blair, Reginald
Elliot, Capt. Walter E. (Lanark)
Inskip, Thomas Walker H.


Boles, Lieut.-Colonel D. F.
Eyres-Monsell, Commander B. M.
Jackson, Lieut.-Colonel Hon. F. S.


Borwick, Major G. O.
Falcon, Captain Michael
James, Lieut.-Colonel Hon. Cuthbert


Boscawen, Rt. Hon. Sir A. Griffith-
Falle, Major Sir Bertram G.
Jephcott, A. R.


Bowles, Colonel H. F.
Farquharson, Major A. C.
Jellett, William Morgan


Bowyer, Captain G. E. W.
Fell, Sir Arthur
Jesson, C.


Boyd-Carpenter, Major A.
FitzRoy, Captain Hon. E. A.
Jodrell, Neville Paul


Bridgeman, William Clive
Foreman, Henry
Jones, Sir Evan (Pembroke)


Briggs, Harold
Forestier-Walker, L.
Jones, J. T. (Carmarthen, Llanelly)


Brittain, Sir Harry
Forrest, Walter
Jones, William Kennedy (Hornsey)


Brown, Captain D. C.
Foxcroft, Captain Charles Talbot
Joynson-Hicks, Sir William


Bruton, Sir James
Fraser, Major Sir Keith
Kellaway, Rt. Hon. Fredk. George


Buchanan, Lieut.-Colonel A. L. H.
Gange, E. Stanley
Kelley, Major Fred (Rotherham)


Buckley, Lieut.-Colonel A.
Ganzoni, Captain Francis John C.
Kidd, James


Bull, Rt. Hon. Sir William James
Gardiner, James
Kinloch-Cooke, Sir Clement


Burdon, Colonel Rowland
Geddes, Rt. Hon. Sir E. (Camb'dge)
Knights, Capt. H. N. (C'berwell, N.)


Burdett-Coutts, William
Gibbs, Colonel George Abraham
Law, Alfred J. (Rochdale)


Burn, Col. C. R. (Devon, Torquay)
Gilmour, Lieut.-Colonel John
Law, Rt. Hon. A. B. (Glasgow, C.)


Butcher, Sir John George
Glyn, Major Ralph
Lewis, T. A. (Glam., Pontypridd)


Campbell, J. D. G.
Gould, James C.
Lister, Sir R. Ashton


Carr, W. Theodore
Grant, James A.
Lloyd, George Butler


Carson, Rt. Hon. Sir Edward H.
Green, Albert (Derby)
Locker-Lampson, G. (Wood Green)


Carter, R. A. D. (Man., Withington)
Green, Joseph F. (Leicester, W.)
Locker-Lampson, Com. O. (H'tlngd'n)


Casey, T. W.
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Long, Rt. Hon. Walter


Cautley, Henry S.
Greer, Harry
Lonsdale, James Rolston


Cayzer, Major Herbert Robin
Greig, Colonel James William
Lorden, John William


Cecil, Rt. Hon. Evelyn (Birm., Aston)
Gritten, W. G. Howard
Lyle, C. E. Leonard


Cecil, Rt. Hon. Lord H. (Ox. Univ.)
Guinness, Lieut.-Col. Hon. W. E.
Mackinder, Sir H. J. (Camlachie)


Cecil, Rt. Hon. Lord R. (Hitchin)
Gwynne, Rupert S.
McLaren, Hon. H. D.(Leicester)


Chamberlain, Rt. Hn. J. A. (Birm. W.)
Hacking, Captain Douglas H.
McLaren, Robert (Lanark, Northern)


Macmaster, Donald
Pinkham, Lieut.-Colonel Charles
Sykes, Sir Charles (Huddersfield)


McNeill, Ronald (Kent, Canterbury)
Pollock, Sir Ernest M.
Talbot, G. A. (Hemel Hempstead)


Maddocks, Henry
Pratt, John William
Taylor, J.


Magnus, Sir Philip
Preston, W. R.
Terrell, George (Wilts, Chippenham)


Malone, Major P. B. (Tottenham, S.)
Prescott, Major W. H.
Terrell, Captain R. (Oxford, Henley)


Marriott, John Arthur Ransome
Pretyman, Rt. Hon. Ernest G.
Thomson, T. (Middlesbrough, West)


Martin, Captain A. E.
Pulley, Charles Thornton
Thorpe, Captain John Henry


Matthews, David
Rae, H. Norman
Tickler, Thomas George


Middlebrook, Sir William
Randles, Sir John S.
Townley, Maximilian G.


Mildmay, Colonel Rt. Hon. F. B.
Raw, Lieutenant-Colonel N.
Tryon, Major George Clement


Mitchell, William Lane
Rees, Sir J. D. (Nottingham, East)
Turton, E. R.


Molson, Major John Elsdale
Reid, D. D.
Waddington, R.


Montagu, Rt. Hon. E. S.
Remer, J. R.
Walton, J. (York, W. R., Don Valley)


Moore, Major-General Sir Newton J.
Renwick, George
Ward-Jackson, Major C. L.


Moreing, Captain Algernon H.
Roberts, Sir S. (Sheffield, Ecclesall)
Ward, Col. J. (Stoke-upon-Trent)


Morrison, Hugh
Robinson, Sir T. (Lancs., Stretford)
Warren, Lieut.-Col. Sir Alfred H.


Mosley, Oswald
Rodger, A. K.
Weston, Colonel John W.


Mount, William Arthur
Roundell, Colonel R. F.
Wheler, Lieut.-Colonel C. H.


Murchison, C. K.
Royden, Sir Thomas
White, Lieut.-Col. G. D. (Southport)


Murray, C. D. (Edinburgh)
Rutherford, Colonel Sir J. (Darwen)
Whitla, Sir William


Murray, Major William (Dumfries)
Rutherford, Sir W. W. (Edge Hill)
Willey, Lieut.-Colonel F. V.


Nall, Major Joseph
Samuel, A. M. (Surrey, Farnham)
Williams, Lt.-Com. C. (Tavistock)


Neal, Arthur
Samuel, Rt. Hon. Sir H. (Norwood)
Willoughby, Lieut.-Col. Hon. Claud


Newman, Colonel J. R. P. (Finchley)
Samuel, Samuel (W'dsworth, Putney)
Wills, Lieut.-Colonel Sir Gilbert


Newman, Sir R. H. S. D. L. (Exeter)
Sanders, Colonel Sir Robert A.
Wilson, Daniel M. (Down, West)


Nicholson, William G. (Petersfield)
Scott, A. M. (Glasgow, Bridgeton)
Wilson, Colonel Leslie O. (Reading)


Nield, Sir Herbert
Seddon, J. A.
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Norman, Major Rt. Hon. Sir Henry
Shaw, William T. (Forfar)
Wilson-Fox, Henry


Norris, Colonel Sir Henry G.
Shortt, Rt. Hon. E. (N'castle-on-T.)
Wolmer, Viscount


Oman, Sir Charles William C.
Simm, M. T.
Wood, Hon. Edward F. L. (Ripon)


O'Neill, Major Hon. Robert W. H.
Smith, Harold (Warrington)
Wood, Sir H. K. (Woolwich, West)


Palmer, Charles Frederick (Wrekin)
Sprot, Colonel Sir Alexander
Wood, Sir J. (Stalybridge & Hyde)


Palmer, Brigadier-General G. L.
Stanier, Captain Sir Beville
Wood, Major S. Hill- (High Peak)


Parker, James
Stanley, Lieut.-Colonel Hon. G. F.
Yate, Colonel Charles Edward


Parry, Lieut.-Colonel Thomas Henry
Starkey, Captain John R.
Yeo, Sir Alfred William


Pearce, Sir William
Steel, Major S. Strang
Young, Sir Frederick W. (Swindon)


Pease, Rt. Hon Herbert Pike
Stewart, Gershom
Young, W. (Perth & Kinross, Perth)


Peel, Col. Hon. S. (Uxbridge, Mddx.)
Strauss, Edward Anthony
Younger, Sir George


Perkins, Walter Frank
Sturrock, J. Leng



Philipps, Sir Owen C. (Chester, City)
Sugden, W. H.
TELLERS FOR THE AYES.—


Pickering, Lieut.-Colonel Emil W.
Surtees, Brigadier-General H. C.
Lord E. Talbot and Mr. Dudley


Pilditch, Sir Philip
Sutherland, Sir William
Ward.


NOES.


Barton, Sir William (Oldham)
Hirst, G. H.
Robinson, S. (Brecon and Radnor)


Bell, James (Lancaster, Ormskirk)
Hodge, Rt. Hon. John
Seely, Major-General Rt. Hon. John.


Benn, Captain Wedgwood (Leith)
Hogge, James Myles
Shaw, Thomas (Preston)


Blake, Sir Francis Douglas
Irving, Dan
Short, Alfred (Wednesbury)


Bowerman, Rt. Hon. Charles W.
Johnstone, Joseph
Sitch, Charles H.


Bramsdon, Sir Thomas
Jones, Henry Haydn (Merioneth)
Smith, W. R. (Wellingborough)


Breese, Major Charles E.
Kenyon, Barnet
Spoor, B. C.


Broad, Thomas Tucker
Kiley, James D.
Swan, J. E.


Bromfield, William
Lambert, Rt. Hon. George
Thomas, Brig.-Gen. Sir O. (Anglesey)


Brown, James (Ayr and Bute)
Lawson, John J.
Thorne, G. R. (Wolverhampton, E.)


Clynes, Rt. Hon. J. R.
Lunn, William
Tootill, Robert


Cowan, D. M. (Scottish Universities)
Macdonald, Rt. Hon. John Murray
Waterson, A. E.


Davies, A. (Lancaster, Clitheroe)
Maclean, Neil (Glasgow, Govan)
Wedgwood, Colonel J. C.


Davies, Major D. (Montgomery)
Maclean, Rt. Hon. Sir D. (Midlothian)
White, Charles F. (Derby, Western)


Galbraith, Samuel
Murray, Lieut.-Colonel A. (Aberdeen)
Wignall, James


Glanville, Harold James
Murray, Dr. D. (Inverness & Ross)
Williams, Aneurin (Durham, Consett)


Graham, W. (Edinburgh, Central)
Myers, Thomas
Wilson, Rt. Hon. J. W. (Stourbridge)


Griffiths, T. (Monmouth, Pontypool)
O'Grady, Captain James
Young, Lieut.-Com. E. H. (Norwich)


Grundy, T. W.
Raffan, Peter Wilson
Young, Robert (Lancaster, Newton)


Guest, J. (York, W. R., Hemsworth)
Rees, Capt. J. Tudor- (Barnstaple)



Hall, F. (York, W. R., Normanton)
Rendall, Athelstan
TELLERS FOR THE NOES.—


Hayday, Arthur
Richardson, R. (Houghton-le-Spring)
Mr. Holmes and Lieut.-Commander


Hinds, John
Robertson, John
Kenworthy.

Clause ordered to stand part of the Bill.

CLAUSE 9.—(Calculation of value for purposes of "ad valorem" duty on wines and cigars.)

(1) For the purpose of the duties charged by this Act on wines and cigars by reference to the value thereof, the value of the goods shall be taken to be the price which a merchant would give for the goods at the time of the payment of the duty if the goods were
bought by him in bond in the United Kingdom, freight, insurance, warehousing, and all other charges paid, and duty shall be paid on that value as fixed by the Commissioners of Customs and Excise.

(2) The provisions of Sub-sections (3) and (4) of Section Twelve of the Finance (No. 2) Act, 1915 (which relate to the determination of disputes as to the proper rate of duty payable under that Section), shall apply to disputes arising as to the proper rate of duty payable under this Act by reference to the value of any goods.

Mr. CHAMBERLAIN: I beg to move, in Sub-section (1), to leave out the words "a merchant would give for the goods at the time of the payment of the duty if the goods were bought by him in bond in the United Kingdom, freight, insurance, warehousing and all other charges paid", and to insert instead thereof the words "an importer would give for the goods if the goods were delivered to him, freight and insurance paid, in bond at the port of importation".

This is in accordance with an undertaking which I gave a short time ago as to the ad valorem duty levied on cigars and sparkling wine when the goods have been stored in bond for some time.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 10.—(Provisions as to Spirits used for Generating Mechanical Power.)

(1) Sub-section (1) of Section One of the Revenue Act, 1906, which provides for the payment of an allowance in respect of spirits used for making industrial methylated spirits, shall apply to power methylated spirits as it applies to industrial methylated spirits.

(2) The provisions of Sub-section (3) of Section One Hundred and Twenty-three of the Spirits Acts, 1880, shall not apply in the case of power methylated spirits, and the substance to be mixed with spirits for the purpose of methylation shall, in the case of power methylated spirits, be such substance or combination of substances, and shall be used in such proportion, as the Commissioners of Customs and Excise may by regulations prescribe.

(3) In this Section the expression "power methylated spirits" means any methylated spirits which are intended to be used in generating mechanical power.

The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): I beg to move, in Sub-section (3), after the word "spirits" ["any methylated spirits which"], to insert the words "(other than mineralised methylated spirits)".
This refers to spirits used as industrial spirits, and the words are taken from the Revenue Act of 1906, where a definition is given.

Sir F. BANBURY: Can the right hon. Gentleman tell us what is mineralised spirit?

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 11.— (Repeal of Customs Duties on Motor Spirit and Motor Dealers Licence Duties.)

As from the first day of January, nineteen hundred and twenty-one, the Customs Duties on motor spirit imported into Great Britain or Ireland and the Excise Duty on licences to be taken out annually by dealers in motor spirit shall cease to be chargeable.

The CHAIRMAN: The first Amendment in the name of the hon. Member for Twickenham (Sir W. Joynson-Hicks) to insert at the beginning the words "Unless Parliament otherwise decides" is unnecessary, and the other Amendments in one way or another involve a charge. The question of the Petrol Tax and Motor Car Tax can be discussed on the Motion "That the Clause stand part."

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir W. JOYNSON-HICKS: In this case I am not proposing any reduction of taxation, but merely a different mode of taxation. The new proposals of the Government are to raise a certain amount of money, between £7,000,000 and £8,000,000, for road purposes by taxation not upon petrol and by motor car licences but upon the horse-power of motor cars. Those who hold the same view as I do are of opinion that it is very much better and fairer to all concerned that the taxation should be as in past years on the petrol, because petrol is the only means we can find which gives some sort of ratio between the taxation and the use of the roads. At the outset I desire to expose one fallacy. I understand that a very large number of county councils and town councils have been writing to Members of this House and telling them that if my Amendment were carried and the horse-power method removed, there would be no taxation of motorists for road purposes. I had a letter from one of my own local authorities, and this apparently emanates from one of the great associations which alarmed the road authorities to this effect. Let me say quite clearly and openly that that is absolutely without any shadow of foundation in fact. We propose, and I am authorised to speak in this matter on behalf not merely of pleasure motorists, but a large number or, indeed, all the motor trade organisations, and we are prepared and willing at the present juncture to pay to the
general taxation of this country for the purpose of the roads this sum of £8,000,000, and no Amendment is going to alter that fact. If the Committee agree with me that the tax should be as it is now, partly on petrol and partly on motor licences then it would be, I take it, for my right hon. Friend the Minister to confer with the motoring organisations between now and Report stage and settle with them the scale of taxation, which could be perfectly easily done, which would produce £8,000,000 sterling for the purposes of the roads. I deny at once and in toto the idea that an Amendment is being moved for the purpose of getting out of the taxation needed for the maintenance and improvement of our roads. On general principles a special tax on any particular form of traffic is not a good tax, but we consent to it for the particular purposes of the moment, because the general funds of the country cannot support a grant-in-aid, which is absolutely necessary for the treatment of the roads to meet the enormous additional traffic. Why do we think this method of taxation is fairer? In the first place, I would remind the Committee of what no less an authority than the Prime Minister of this country said when the taxation of motors was first suggested. Speaking in October, 1909, the Prime Minister said:
To get any sort of criterion by which you are to get a contribution in proportion to the amount of damage done, you must introduce two elements (that is, horse-power taxation and Petrol Duty). I cannot imagine a fairer way of doing it than that which we propose.
That is the present system. The Secretary of State for India, when he was Financial Secretary to the Treasury in 1915, when there was again a proposal to increase the amount of taxation put upon the motoring community said
It must have been obvious from the corespondence in the Press, and the communications received that it is very difficult to devise a scale of licence duties which shall be equitable.
That is the line which the Government took for the last 11 years, and they have had this taxation of a combination of licence duty and petrol duty as the fairest criterion of the amount of traffic. It was not until my right hon. Friend came into office that the Government took up the idea that horse-power taxation
of motor cars was a better method. The Committee will remember that he founded his policy when the Bill was brought in in March of this year almost entirely on the report of a Departmental Committee which reported very strongly in favour of taxation by horse-power. That Committee, of which Sir Henry Maybury was Chairman, and on which there sat a representative of the Government Departments and of the motor organisations, reported with two or three exceptions in favour of horse-power taxation. I asked the right hon. Gentleman from time to time whether that Committee was not more or less ordered, though I will not say that but call it directed by him, to find in favour of the petrol scheme of taxation being abolished. He told me I was entirely wrong. The Minister of Transport on 20th April, in reply to my remarks, said
I was asked 'Were the Committee told that the Petrol Tax must go?' Certainly not, they arrived at their decision after careful consideration." —[OFFICIAL REPORT, 20th April, 1920, col. 304, Vol. 128.]
Speaking on 27th April, the Minister of Transport said:
I was not at the Committee, and no instruction was given by me to the Committee; or heard in this House.—[OFFICE REPORT, 27th April, 1920, col. 1133, Vol. 128.]
7.0 P.M.
It is perfectly clear that my right hon. Friend flourished that Report before the House and said he could not go behind it. Will the Committee believe me when I say that I have been able to find out that this very Committee which had reported in favour of horse-power taxation had two months before sent in an Interim Report to the right hon. Gentleman absolutely and entirely in favour of continuing the tax on petrol? I have got the Report here. I have no doubt it was merely overlooked by the Minister in his speech. I subsequently asked him to publish it, but owing to the expense of printing he asked me not to press for it being printed, but he gave me permission to make such use as I liked of it. I cannot give any better arguments than were contained in this, I will not say, suppressed Report, but this overlooked Report, which ought to have been given to the House at the same time as the other Report was published. This Report is signed by General Maybury on behalf of the whole
of this very excellent Committee, and it says:
We have carefully considered three possible bases of taxation, namely:

(a) Taxation proportionate to user.
(b) Taxation of the vehicle.
(c) A combination of both principles…

We consider that the taxation of motor spirit is the most practical method of charging proportionate to user … A tax on motor spirit would appear to be reasonably fair when applied to user, and also when regard is had to weight and speed, and thus to the amount which may be assumed to be taken out of the road. … The Commitee have carefully considered whether there is any practical alternative and are unable to suggest any, beyond a graduated licence duty on all classes of vehicles. The objections to such a system of taxation are, however, greater, in the Committee's view, than the objections to the Petrol Tax.
They go on:
We think that a revenue of £4,000,000 per annum from a flat rate of 4d. per gallon may be considered a conservative estimate in two years' time. We are of opinion that the remission of Excise Duty on home-produced spirit should be continued, for the following reasons:

(a) Difficulties and cost of collection.
(b) The necessity in the national interests of encouraging home-produced spirit.
(c) The fact that for some years to come the total of home-produced spirit is not likely to exceed 20 per cent. of the total consumption."

This is my right hon. Friend's own Committee reporting, and they add:
We have come to the conclusion that road vehicles propelled by steam, electricity, or any power other than petrol should be specially taxed.
They summarise their recommendations as follows:
(1) Taxation of motor spirit should be continued.
(2) A flat rate per gallon should be levied on all imported motor spirit used by mechanical road vehicles of every description.
I think the House and the country ought to be made acquainted with that Report, which this Committee, after full consideration, made to the Minister without any direction on his part. The Minister told us that the Committee had not been directed to throw over the petrol tax, but when he got this Report in favour of the petrol tax and against the scheme which even at that time was, I suppose, floating in his mind, he wrote to Sir Henry Maybury, his own servant, the head of one of his own Departments, as follows:
I have received your Report on the deliberations of your Committee, and I would like to convey through you my thanks to them for the very business like way in which this intricate problem has been tackled. … I have been looking at the figures from May to October of this year, and I see that full rate duty spirit has risen from 6,000,000 to 10,000,000 gallons a month, but that there is, practically speaking, no rise in the half-duty rate.
This is where the right hon. Gentleman has gone wrong, for he jumped to the conclusion that there was something being done by the users of commercial vehicles to evade the payment of petrol duty. He goes on:
It is no use, however, adopting a basis of taxation which is not going to be fruitful and is not really going to represent a tax on road users according to their use of the road, if they are going to use the road and evade the tax. … I would also like to consider what possibility there is of ensuring that any reduction in the Petrol Tax will inure to the benefit of the consumer.
The great organisations have agreed that if the petrol tax were reduced by 6d., they would reduce the cost of petrol by 7d. Since they made that offer to my right hon. Friend, they have put 8d. on to the cost of petrol. My right hon. Friend goes on in his letter:
If my suspicion is right—that a tax on petrol no longer accurately represents the amount of road user of mechanically propelled vehicles—some other method of taxation will have to be devised.
He sent the Report back to the Committee. If his figures had been right, that the rise in the commercial petrol was not in proportion to the fully duty-paid petrol, then there would be something in his case, but what are the facts? They have come out in answer to questions in this House, from which it appears that during that particular period the War Office and the Ministry of Munitions placed on the market the whole of their accumulated stocks of benzole, and naturally the commercial community bought these duty-free stocks of benzole. They were quickly used up during these four or five months, and as soon as the benzole stocks had been used up, the increase in the use of commercial petrol went on as merrily as before, and my right hon. Friend's figures, though right but for this explanation, are totally wrong at the present day. In other words, there is no real evasion of the petrol duty by the
commercial vehicle users of this country, and the proceeds of the tax are growing so rapidly that I do not think it will be very long before even on a basis of 4d. they would easily get more than half the amount which they require for the purposes of this tax. I submit that the First Report of the Committee is more worthy of the respect of this House than the Second Report, and that the original report was the report which they made when they were free to discuss the matter amongst themselves, without being biassed by the views of my right hon. Friend. Of course, Sir Henry Maybury was bound to take the report back when he received a letter of that kind from the Minister, and I am not blaming Sir Henry at all. The Committee reported on the assumption made by the right hon. Gentleman that there was petrol evasion by the commercial motor users, and so they reported that the only possible thing was a horsepower tax. I submit that there is no such evasion of any kind. I want to put it to this Committee that it is unfair that the user and the owner of private cars, or indeed of commercial cars, should be so charged.
I have had endless letters from places like laundries and shops with two or three commercial cars, who use them from time to time—some are in dock, some in use, some are used for short mileage—and they say it will increase their tax enormously if they have to pay £20 per car on a car of 20 h.p. rather than pay on the amount of petrol they are using. They do not object to paying in accordance with the use of their cars, and they say that if their business is good and they have enough business to run half-a-dozen cars all day long, they will be paying according to the amount of damage they do to the roads. My right hon. Friend told us that the only organisation which was opposed to his tax was the Automobile Association, of which I have the honour to be chairman, and he rather discounted us because, although we have 130,000 members, we are only so-called pleasure cars. I object to the term pleasure cars, because of the user of cars by business men included in the membership of the Association, and there is a comparatively small number of cars used exclusively for joy rides; but since my right hon. Friend's views and
proposals have become known, a very different state of things has taken place throughout the country. I am authorised to-day not to speak merely for pleasure users, but for the great building organisations, the great motor trade organisations, of this country, who have come to the conclusion, and whose members are arriving at the conclusion day by day, that this tax will seriously injure the motor building trade. It is not only the Automobile Association, but I have here letters from many other organisations. The Society of Motor Manufacturers is unanimously against this tax. The Association of British Motor Manufacturers, Limited, writes under date of 1st July as follows:
Replying to your letter of the 28th June, I write to say that the opinion of this Association has all along been that the taxation of motor fuel is the only fair as well as the most practical way of taxing motor vehicles.

The MINISTER of TRANSPORT (Sir E. Geddes): From whom is that letter?

Sir W. JOYNSON-HICKS: It is from the Association of British Motor Manufacturers, Ltd., and it is signed by Mr. H. Underdown, the President of the Association. The letter goes on:
… as well as the most practical way of taxing motor vehicles, in that it is a method of taxation as nearly as possible proportionate to the user of the roads…. This Association represents all the leading British private and commercial vehicle manufacturers.
The Motor Trade Association write on the 29th June:
The Management Committee and Council of the Motor Trade Association desire me to express to you our strong protest against the proposed new method of motor taxation. We consider that the proposed method of horse-power taxation will have, and, in fact, already is having, a seriously bad effect on the motor industry.
The Motor Agents' Union write on the 25th June:
On behalf of the members of the Motor Agents' Union, numbering at the present time, 3,000 of the leading motor car dealers of the United Kingdom, I desire to protest against any method of taxing motor vehicles, both private and commercial, by any means other than on the amount of fuel used for their propulsion.
There are letters also from the Agents' Section, Limited, the British Cycle and Motor Cycle Manufacturers' and Traders' Union, Limited, and the Agricultural Engineers' Association,
all putting forward the same views. In other words, all these people whose commercial prosperity is bound up in the continuance of the prosperity of our road transport. It is not merely pleasure motors, but it is the whole organisation of mechanically-propelled transport of the Kingdom, and with the railways crowded, as my right hon. Friend tells us, with more traffic than they can carry, it is absolutely essential, in the interests of commerce, that motor traffic and motor organisation should be encouraged as much as possible. I think I have put forward the main facts of the case, and I do ask the Committee to agree with me, and those hon. Friends of mine who have put down an Amendment to leave out the Clause, that we should strike out of this Bill Clause 11, which does away with the old petrol duty, and if we succeed in striking it out, then we can discuss a scale of taxation on petrol, which would be fair, and probably an increase on the present licences on motor cars.
I should like to refer to a statement made by Sir Henry Maybury some months ago, that it would be necessary to put a tax of 1s. a gallon on petrol to produce this sum needed. An hon. Member behind me says 1s. 3d. I will not discuss such an absurd figure, but will use Sir Henry Maybury's figure of ls. We have asked him to state his reason in writing, and to receive a deputation to discuss it with him, and he has refused both requests. The importation of petrol to-day is 160,000,000 gallons per annum. Next year, Sir Henry Maybury says, there will be 750,000 motor vehicles on the roads. I should say the importation will be very nearly 200,000,000 gallons of petrol. That, at one shilling, would mean £10,000,000 a year. Add to that the existing licence duties, and reasonable taxation on steam and electric vehicles, and you get £13,000,000 or £14,000,000 a year, which is nearly double what my right hon. Friend is asking. A flat rate of 4½d. on petrol, with a reasonable increase of the existing licence duties, and taxation on steam cars and electric cars, would provide the £8,000,000, and if my hon. Friend behind thinks 4½d. not enough, I will give him another ½d. We are not trying to get out of our taxation, but we are only asking that we who have got to pay should be allowed to say in which way we pay.
Finally, I want to appeal to those 95 Members of this House who put down the Amendment, jointly with myself, to leave out the Clause. I do hope that Members who have gone to that length will not run away merely at the threat of the Government Whips. This is not a question of confidence in the Government. It is not fair for my right hon. Friend opposite, if he is going to do so, to say that if this Clause is deleted, the Government will have to go. We are his supporters. Most of the Members who are opposed to this Clause are supporters of the Coalition, and we do not want to turn out the Government on an insignificant question of this kind, but we do say that we, as supporters of the Government, are entitled to come to the Government and say that we prefer taxation this way instead of that way, and it is not fair to hold a threat over us of putting on the Government Whips. I therefore appeal to my right hon. Friend to allow his own supporters to vote as they think right in this matter, and I appeal to those Members who have testified that they think it is right to leave out the Clause, not to be intimidated even by my right hon. Friend, but to carry their object by voting, if necessary, in the Division Lobby to-night.

Commander Viscount CURZON: I should like, as far as I can, to reinforce everything that has been said by my hon. Friend who has preceded me in this Debate. I should like to make clear that I speak, not as representing any motor organisation, such as my hon. Friend represents, but merely as a private user of motor cars—a user who has had a good deal of experience. I do not wish to get out of paying any of the taxation that is required for motor cars towards paying for roads. We who use motor cars want to have good roads. I say "we who use motor cars." I do not speak only for the users of private motor cars. I had a conversation only yesterday with a gentleman who is connected with the London General Omnibus Company, and he told me that his company are willing and anxious to pay for good roads, because they are so essential to the upkeep of their vehicles, and, as we who use the roads know, some have got into a deplorable condition and are rapidly deteriorating as a result of the War. We do not want to get out of paying for the roads, but what we do want
is to have a say in how the money is to be raised from us. The right hon. Gentleman proposes to impose a tax upon horse power. I think, personally, that is the worst possible form of tax. The three main factors which wear away the roads—I am sure I shall be borne out in this by hon. Members who have experience of county councils, and so on—are the mileage run by car, the amount of its horse power, and the speed at which it travels. All those things mean an expenditure of fuel. The greater horse power, the greater speed, and the greater mileage, all mean an increase in the amount of fuel used, and, therefore, if you had a tax on fuel, be it petrol, benzol, or even paraffin, if you could use it and tax it, you would pay, at any rate, in accordance with the ratio in which you used the roads. The right hon. Gentleman's proposals bear no relation to this whatever.
The right hon. Gentleman is the fortunate possessor of a car—I will not mention the name, because I do not want to give it an advertisement—of 40-horsepower, and if one looks at the table prepared by the Ministry of Transport on the taxation of motor vehicles, it will be seen that if a 40-horse-power car runs 10,000 miles on the proposed basis of taxation, it will come off £9 3s. 4d. better than if it paid according to the old rate. I am perfectly certain that it is not the wish and the intention of this House that people who own 40-horse-power cars should get off lighter in these days of taxation. I have here an advertisement of another make of car which is advertised in these terms: "When the new Budget taxes are in force, it will be still cheaper to run your 35-horsepower—" I will not give the name of the car, but that is how the car is actually advertised. I maintain that is not at all what this House wants. The principle I have heard so ably enforced in this Debate already is that the tax should be paid by those who are best able to pay it, and if you can afford to run a 40-horse-power car, I maintain that you should pay a fairer share of the taxation. It is true that when the mileage is reduced to 2,500, according to the Ministry of Transport's own table, you pay more. But that is exactly what you do not want to do, because if you are not
using the roads so much, why should you pay for others who do?
I maintain that to put the tax on horse-power is thoroughly bad, and I do hope the Minister of Transport will be able to reconsider this matter. He has shown so far no sign of being ready to consider the opinion of really nine out of ten motorists in this matter. The great argument alleged against a fuel tax is the difficulty of rebates, which render collection so expensive. New proposals which have been submitted, I believe, to the right hon. Gentleman proposed to do away with all the rebates as far as possible, and it has been worked out more or less that the cost was about £64,000 a year. But if you do away with the rebates, in the words of one of two Members of his own Committee on taxation, you very largely do away with the objection. Mr. Rees Jeffreys, for instance, who was on the Committee, said the abolition of rebates would go a long way to remove the objection to the petrol tax and remove the cost of collection. It is now proposed to allow a rebate of 25 per cent. on cars built before 1913. I therefore think the question of rebate cannot really have been the cause of the right hon. Gentleman wishing to impose taxation on horse-power.
I am told—I do not know with what truth—that one great section of motor vehicle users, mainly, commercial motor vehicle users, are very anxious to have the horse-power tax. That may be so, but I have had a conversation with one or two large users of commercial motor vehicles, and they are quite doubtful as to whether they are really enthusiastically in favour of it, because if you take the case of, say, a motor omnibus which pays £84 under the Government proposal for taxation by horse-power, it may be laid up for repairs for a long period, and not be able to earn any money. Therefore, that would be certain dead loss to the firm, whereas if the tax were paid according to the fuel used, it would pay according to the amount it used the road. I do hope the right hon. Gentleman will be able to give some consideration to what, I am sure, is the majority opinion of motor users in this country. We do not want to get out of paying money, and we want to see that we get good roads, but it is only a question of how we pay the money, and I hope the right hon. Gentleman will be able to
make some concession to motorists in this matter.

Mr. TURTON: The hon. Baronet (Sir W. Joynson-Hicks) alluded to a circular, which he intimated was sent out by some association, in which I gather there appeared a phrase that motor owners would be contributing nothing to the upkeep of the roads unless this Clause were passed. I happen to have the honour to be Chairman of the Parliamentary Committee of the County Councils' Association, and I can only say on behalf of that association that I know of no such circular having been sent out. I shall be glad if the hon. Gentleman will repudiate at once, on behalf of the County Councils' Association, that they sent forth any such document.

Sir W. JOYNSON-HICKS: I quite accept my hon. Friend's statement. A large number of letters have been received—I have seen several in the House to-day to the same effect—and somebody told me that they emanated from some central association.

Mr. TURTON: It is far too important a question to deal with a side issue of this nature as to whether some association has sent out something one way or the other. On behalf of the County Councils' Association, who are responsible as highway authorities for the main roads of the country, we are bound—and we are unanimous in this matter—that we must see we receive adequate contribution for the upkeep of the roads.
It is perfectly certain that it is idle for us to-day to go to the Chancellor of the Exchequer and ask for any more grants-in-aid. But we have been even in the past far too heavily rated. Rates have been borne in the past principally by the farmer, and those who have used the roads have practically paid no share or adequate compensation towards the upkeep of those roads. But the time has come when that must cease. Therefore we welcome this Clause which the hon. Baronet opposite and the Noble Lord have just suggested should be rejected. We welcome it. I am speaking now on behalf of the County Councils' Association of England and Wales. The hon. Baronet has made an offer which I frankly admit was not in our mind at the time that this question was discussed by the County Councils' Association. I want
to be perfectly frank and fair to the hon. Baronet. He has intimated that he and his friends are willing to pay some share towards the upkeep of the roads. I understood him to go so far as to intimate to the Committee that he is prepared to find an equal amount from a petrol tax if this vehicle tax is put to one side.

Sir W. JOYNSON-HICKS: Yes, I did.

Mr. TURTON: That is a very fair offer; but might I point out to the Committee that neither the hon. Baronet nor the Noble Lord who followed gave the slightest indication how this money would be raised! We know perfectly well that a mixture will very soon be forthcoming in which petrol will bear a very small part. For the moment the matter is one for our individual opinion; but I would not admit, on behalf of the County Councils' Association—though we have had this talk of a guarantee—that if you had a tax on petrol you would raise the amount which is absolutely necessary for the roads to be kept in repair. We will follow with some interest the views of the 92 Members of the party, and will be interested to hear what they have to say, and equally interested to see whether they will stand to their guns, or, like some hon. Members on other occasions, sign documents to this House, and, under the influence of the Whip, go into another Lobby. Our point of view, at any rate, is this: that this is the only real method by which we can get that sum which we say is necessary for the upkeep of the roads. The farming community, especially, have got tired of paying for the upkeep of roads for the benefit of those who use them, and do not contribute towards that upkeep. The thing now has got to breaking point. The incidence of local taxation is so unjust at the present time that, speaking as one who has considerable influence in my own county council—that of the North Riding of Yorkshire—I can say that motorists will find that these roads are not going to be kept up in the future as in the past until funds are forthcoming from those who use them. I can only say this: if there is a straightforward offer of £8,000,000 per annum from a petrol tax, then that is so much to the good. Although I have no right to speak in this matter for those for whom I am speaking generally—the County Councils' Association—I do say that we scarcely believe
any such guarantee will be, or can be, forthcoming. Therefore I welcome the suggestion in the Budget, and we shall certainly vote for the retention of the Clause.

Sir E. GEDDES: The imposition of this additional tax, and the method of it, is a matter of expediency. It is in order to raise a sum about which there is no dispute, namely, a net 8¼ millions or 8½ millions per year. I think the Report is 8¼, but it works out really at a little bit more. The motorists have agreed-and I am not talking of the motorists for whom, perhaps, my hon. Friend opposite principally spoke, but for those who use motor vehicles generally on the road. I am thinking not alone of pleasure cars, but those used for business purposes. Motorists generally have agreed that owing to the existing state of the finances of the country, although they hope they will be relieved at a later date, they are prepared now to accept a tax which puts upon them a very considerable burden in the maintenance of the roads. A Departmental Committee was appointed. It was a very representative Committee. The hon. Baronet (Sir W. Joynson-Hicks) endeavoured to convey to this Committee that that Departmental Committee was forced by me, in some extraordinary way that I am supposed to have, to report something that they in their heart of hearts disliked. I should like to read the names of those who are on that Committee. Sir Thomas Berridge, representing the Royal Automobile Club; Mr. Shrapnell-Smith, Commercial Motor Users' Association; Major Stenson Cooke, Automobile Association and Motor Union; Mr. F. L. D. Elliott, representing the Police Authorities; Mr. C. W. Tindall, Agriculture; Sir Harcourt Clare, of the Local Authorities; Mr. F. Pick, London and Provincial Omnibus Owners' Association; Mr. W. Rees Jeffreys, Society of Motor Manufacturers and Traders; and Mr. Pascoe, Board of Customs and Excise.
We had there a very representative body of men. They presented an interim Report, which the hon. Baronet has read. To this I replied. This, I think, I may describe as a very mild and rather reasonable reply. There is no question about that. I merely made an observation—a very mild one—upon the Report, and in point of fact I had no further communication with the Com-
mittee. I think they made this Interim Report after a very preliminary consideration. They considered the matter further, and came to their conclusion, after taking evidence—for they had taken no evidence up to that time. They desired, and I frankly desired, at that time the best form of motor tax to cover the user of the roads. I thought petrol was a good way. I went into the figures, and I merely made the comment to which the hon. Baronet has drawn attention, which was that the half-rate spirit was not going to pay. After taking evidence the Committee came to the conclusion that the suggested petrol tax was impossible. Major Stenson Cooke dissented from the Report. Apart from that the Report was agreed to unanimously with the exception of one or Members who safe-guarded points that they wished to have further explored. But they signed the Report. They still felt it might be possible now or in the future that some other means could be adopted.
The principal difficulty in basing the tax upon the alternative which is suggested, namely, the petrol tax, is that while motor spirit supplied basis upon which you are going to levy a tax that—the evidence given showed it—it is impossible to say what motor spirit is. If we could put it on motor spirit, and we knew that motor spirit was a fair index of the user of the roads, there would be a great deal to be said for putting the tax on that way. But no one can say what motor spirit is. Petrol has been adopted by the speakers officially. We have heard nothing but petrol this evening, nothing but tax on petrol. It is not the only motor spirit. There are many other ways of getting an internal combustion engine to run and to work. There is to-day in London a large fleet of busses, I think Tillings, and I am told, and I believe it to be the fact, that they are not run on a single gallon of petrol. They are run on kerosene oil and benzol.
Throughout the country, with the increased price of petrol, the brains of the industry are being devoted to find some other means of carburation which will enable them to use other motor spirits which you cannot tax. If you take the petrol users and the case of the motorists for whom the hon. Gentleman opposite spoke, you will find they are thinking of the Automobile Association principally. In this discussion to-night what have we
heard? We have heard that these people will be prepared to tax themselves, and a petrol tax or a horse-power tax is the only thing that interests them. They are not interested in the seating capacity and weight of vehicles which are not taxed on horse-power at all. They are not interested in commercial vehicles. Not a word is said about that aspect of the subject. Not a word except about the horsepower of the pleasure vehicles.
Steam is increasing enormously. There is no tax on the fuel there. Electric vehicles around our urban areas are increasing enormously. There is no tax on fuel there. You have got mixtures of various kinds, and new fuels coming into the market, and the whole brains of the industry is trying to find fuel that cannot be taxed in the way that petrol is taxed. The hon. Baronet made a great point of the fact of my observation on the Committee's Report, and he invited an explanation; but it is for the Committee to give him an explanation. I pointed out that half-rate spirit was falling. The hon. Baronet said what about the temporary increase in the amount of benzol, and other substitutes put upon the market. But has petrol consumption increased during the last few months? I think there is no hon. Member of this House who has gone about the roads of the country who would not say that the number of motor vehicles is increasing enormously everywhere. Therefore, you would suspect that there would be an enormous increase in the use of petrol—the petrol which pays duty. Let me give some figures. For November of last year the figure was 12,600,000 gallons: December, 11,150,000; January, 13,615,000; February, 12,063,000; March, 13,500,000. There is there no great increase in petrol consumption. There is the answer to the hon. Baronet. It is common knowledge. Every Member if this House knows about it.

Mr. BILLING: These were the winter months. There is no pleasure motoring in the winter months.

Sir E. GEDDES: Pleasure motoring, after all, is not the only thing. That is one of my complaints. The hon. Members who have spoken have only pleasure motoring in mind. I am thinking of commercial motoring. There is no increase in the use of petrol. Yet you have only
got to look at the roads and see the number of vehicles upon them. Petrol is no index to these. I have to find some other means of raising the money, and because it is not a true index I cannot accept it, and it will be less and less a true index as months go by. A great complaint is made against the vehicle tax. The proposals of those who think with the hon. Baronet and his Friends reached me only this morning, and I ask the Committee to consider what the opponents of a vehicle tax propose. They propose a 4½d. flat rate for petrol, and that means that they are proposing to relieve pleasure motorists of £1,000,000 taxation and at the same time they wish to add to the taxation of the commercial motor owners. Then they proceed to put on a vehicle tax which I myself proposed for another class of vehicle. The only thing they wished to do is to save the private car owner by putting him on a petrol tax and then they give us this horrible collection of licences and taxation of vehicles, and we have all the evils of both systems, and they say that they will raise £7,250,000 gross, not net, and Heaven only knows what the cost of collection will be.
The tax which I recommend produces a net income, and it is very economical as far as administration is concerned. It will produce £8,250,000 net after we have paid the £600,000 of our hypothecated revenue to the local authorities. My hon. Friend who moved this Motion told the Committee, in a very impressive way, of all the great authorities who were behind this proposal. Surely I am right in saying that the greatest authority of all which is going to pay for the use of the road is the Association that represents the road users most of all. I have here a Report of the Standing Joint Committee of Mechanical Road Transport Associations which consists of the Commercial Motor Users' Association, the Electrical Vehicle Committee of Great Britain, the Furniture Warehousemen and Removers' Association, the London and Provincial Omnibus Owners' Association, the National Motor Cyclists' Fuel Union, the National Traction Engine Owners' and Users' Association, the National Union of Horse and Motor Vehicle Owners' Associations, the Showmen's Guild, and the Steam Cultivation Development Association. They are the most representative body of road users we have got, and they are all
strongly in favour of this tax. So much so that to-day Mr. Shrapnel Smith, in a letter dated the 5th of July, says:
Dear Sir Eric Geddes,
I write as Chairman of the Standing Joint Committee of Mechanical Road Transport Associations—the only 'grouped' section of road users with a Joint Committee going back to 1912—to inform you that this Committee has by resolution re-affirmed its decision that the proposed vehicle tax basis is in all the obtaining circumstances preferable to a continuance of the Petrol Tax alone on a flat basis, or conjointly with the vehicle tax.
I claim that I have got there in my support the most representative body of road users, and, after all, they are the people we have to consider the most. They are not private owners, or those who exceed the speed limit. They say they supported this proposal because they realised that it was the only practical tax, and they are a very representative body. The hon. Baronet opposite said that he had the motor manufacturers with him. The Society of Motor Manufacturers and Traders appointed a member to this meek and milk Committee which is supposed to do whatever the Minister says. On this Committee was Mr. Rees Jeffreys, the accredited representative and spokesman of the Society of Motor Manufacturers and Traders. I believe he is still on the Committee and still their representative; at any rate, they have not told me that he no longer represents their views, and he signed the Report without qualification.

Sir W. JOYNSON-HICKS: Not without qualification.

Sir E. GEDDES: At any rate, he is the official representative of the Society of Motor Manufacturers. This proposal is also supported by the omnibus industry and the agricultural industry as well. You cannot tax fairly and bring everybody in on petrol alone, which would increase the cost of collection ridiculously and squander the tax. The alternative suggestion which has been made will not produce the money required, even in the gross. We have in favour of this tax the local authorities, who, after all, are interested in seeing that the money will be forthcoming. The manufacturers, the commercial motor users, and the Royal Automobile Club support this tax, and simply because
there is one association that does not support it we have had all this Debate urging us to reconsider the tax. In the opinion of the Government this tax, as put forward, is the fairest way in ratio. It has been agreed to by the Committee as the fairest way, and it is the only economical way of raising the money at the present time, and for these reasons I commend it to the Committee.

Mr. BILLING: After the very handsome testimonial which the Transport Minister has read to the House from Mr. Shrapnell-Smith, I suppose there is nothing more to be said. Who is Mr. Shrapnell-Smith? He is a gentleman deeply interested in commercial motors. If every Minister is going to have a testimonial which reads, "Dear Sir—We have tried your taxation, since when we have tried no other," then the function of critics here will disappear altogether. I thank the right hon. Gentleman for making the first three-quarters of my speech for me, because he has not only proved the fallacy of a taxation on horsepower, but he also devoted the greater part of his speech to showing the fallacy of taxation of fuel. Neither fuel nor horse-power has any relationship to the destruction of the roads. Fuel has less relation to this matter than any other part of a vehicle which could be more easily taxed. For the last ten years I have advocated the taxation of that part of the vehicle which actually wears the roads, and if the right. hon. Gentleman would only consider the taxation of tyres which destroy the roads it would be a better plan. The amount of use of a motor-car and the amount of employment of the motor-car on the roads should be the basis of the tax. It is grossly unfair that the owner of a 40 horse-power car who runs his car, perhaps, 30,000 miles a year should pay only £40, while the owner of a small light car, for example, a Ford, should pay £23 for a car which he uses only occasionally at week-ends. The incidence of the tax is grossly unfair. All the commercial users are supporting this proposal because they are getting off more lightly. The commercial users are getting off at the expense of the private users, who are getting very little consideration.
It is the small private user, the motorcyclist, the man with his bicycle and sidecar who tries to get away for week-ends,
the man who uses his car for relaxation, these are the users who ought to be considered, and they are a class of users who are by no means limited to the wealthy. All our working classes now are beginning to take advantage of the open road in this way as their incomes are increasing, and it is unfair that they should have to bear the burden of this taxation. There is a spirit of arrogance introduced by the hon. Member who spoke before the Minister who said that he would drive us all off the roads by making them impossible to ride upon. Does he think the motor-car drivers or the owners of horseless carriages are a class apart from the general public? Every county has its own motor-car users and the residents of one county enjoy the facilities and the roads of another county, and therefore it is an equal exchange.
8.0 P.M.
You have only to see a horse vehicle turn round in the road to see the amount of damage the iron tyres do. I think it is quite feasible to tax motor cars by a tax on the tyres. If a tax of 2s. or 3s. is put upon tyres the revenue might be raised in this way. I would tax iron tyres as well, but I do not think they ought to be used on the road at all. There is no occasion for iron tyres; there is very little occasion for solid tyres. In America, by the employment of pneumatic tyres for motor buses and large lorries, there is an enormous saving to the country generally. We want a little more intelligence on the part of our taxing authorities. They are too prone to take what they think is the shortest cut, with the result that they embark on most unjust and most unfair taxation. Of course those who are going to use the roads most are going to destroy them most, and they are the very people who are applauding this tax. The owner of the higher power car, the wealthy man who really uses his car every day to and from his business, and perhaps two or three hundred miles each week-end will get off practically scot free. It is the owner of the Rolls Royce who will escape the burden which the poor man, the owner of the Ford, is going to pay. The right hon. Gentleman, I hoped, when he spoke, was going to tell us something to prove the justice of his proposal, but he simply said to us, "There it is, take it or leave it." I hope we shall get an opportunity of going to a division before dinner, so that we may by a substan-
tial vote prove to the Ministry the mistake that is being made.

Major-General Sir J. DAVIDSON: I want to endorse the remarks of the Minister of Transport. It is obvious to me that the hon. Baronet (Sir W. Joynson-Hicks) made a most unfair accusation against the Committee. The Committee's first report was based on very little information, but then they called in expert evidence and changed their front altogether. There was no coercion put on them. It was the further investigation which they conducted which showed that no proper standard could be laid down for the taxation of fuel. How are you going to tax benzol?

Mr. BILLING: How do you tax whisky?

Sir J. DAVIDSON: You do not drive a car with whisky. It seems to me an extraordinary thing that commercial motor users and omnibus associations should both agree on this proposal. I wish to say I entirely support the proposals of the Minister.

Major PRESCOTT: A considerable portion of the speeches has been devoted to criticising the Report and Recommendations of the Departmental Committee on the Taxation of Motor Petrol. Having read that Report, I must say I regard it as a most fair and impartial Report. Any hon. Member reading it must inevitably come to the conclusion that the Members of that Committee dealt with a very difficult problem in a very honest way. There seems to be general unanimity in this House, and I am very glad of it, as to the immediate necessity of finding something like seven or eight millions sterling for the restoration and reconstruction of miles of highways in the country. After four years of war, it will be found that the main roads of the country were never in need of greater repair than they are at prseent. Speaking as a road engineer who has been engaged for something like 30 years in road construction, I am in a position to say there are hundreds of miles of roads the foundations of which have absolutely collapsed. The whole fabric of construction has gone. The Automobile Association and the Motor Union contend that the Motor Spirit Duty is the only sound and equitable basis of taxation. I would like to point out that, if the existing
method of taxation continues, and if we are to raise this seven or eight millions for road purposes, the net revenue required by the Minister of Transport to carry out this work, it will mean that the light motor car users will have to pay a very severe tax of ls. 3d. per gallon on petrol, as against 6d. at the present time. Such a charge as that would be disastrous to the motoring community. Unless this single tax system recommended by the Departmental Committee is adopted, I see no hope of raising the money needed for the repair of the highways of the country.
I should like to mention in this connection a point which has a very important bearing on the question of taxation. It is the matter of the classifying of the roads of the country. Unless we can get this seven or eight millions of money the classification proposals of the Ministry of Transport must inevitably be abandoned. It is no use classifying the roads of the country if the Ministry is not provided with the necessary funds to make grants on an agreed basis to the various road authorities. May I remind the House that the Departmental Committee on Local Taxation, in their Report of the 3rd March, 1914, recommended that, as a necessary preliminary to any alteration in the system of the distribution of Imperial revenues for local taxation, the roads of the country should be classified. In consequence of that Report the late Road Board was invited by the Treasury to prepare a classification scheme on such lines that it could be used as a basis for grants from the Exchequer towards the cost of the maintenance of the roads. The Road Board complied with that request. They issued a circular to all the highway authorities in the administrative counties of England and Wales, and I believe they received replies from something like 1,567 highway authorities. A. preliminary classification was arranged, but that was interrupted by the outbreak of war. The final classification of these roads is now being proceeded with under the new Ministry of Transport Act of last year. Again, all the county councils are sending in classification schemes for themselves and the various highway authorities in their areas in connection with main and secondary roads, and the Government Roads Advisory Committee, of which I
have the honour to be a member, will be meeting very shortly to prepare a permanent classification. That great work of classification must of necessity be abandoned unless this £8,000,000 is found. The Automobile Association favour the retention of the spirit duty, and are against the substitution of any alternative method of taxation. There are, however, serious difficulties in the way of collecting this duty. The hon. Baronet (Sir W. Joynson-Hicks) said something about raising £10,000,000 in connection with petrol. I think he forgot all about the leakage that takes place. In the case of the owners of great commercial undertakings, which have large fleets of motor cars, and participate in the allowance for leakage, what happens is a matter of common knowledge. Nine out of ten of those owners have pleasure cars as well, and they help themselves to petrol from the common stock. In that way the Road Fund loses a considerable amount of money.
The Motor Spirit Duty fails to cover all liquid fuels, and the Departmental Committee point out the disadvantages of the present system. They say that the users of paraffin, benzol, shale spirit, gas, and other substitutes for traction purposes, escape taxation, and vehicles propelled by steam and electricity also escape. They also point out that fraudulent practices are very difficult to detect, so that the Road Fund is thus deprived of a large source of revenue. In my view the pleasure motorist has nothing to complain of under this new scheme of taxation. The pleasure motor cars are asked to pay, in the bulk, not more than £400,000 beyond what they are paying now, while commercial vehicles are to find the difference between the£800,000 which they pay under the present method of taxation by the Petrol Duty, and £3,500,000 which they will be called upon to pay under the proposed new tax. That represents an increase of something like 10 per cent. for the pleasure motors, whilst for the commercial motor user it represents an increase of well over 300 per cent. Those are facts which I think the hon. Baronet will find it difficult, if not impossible, to refute. I fail to understand why it is alleged that an excessive burden is being placed upon the pleasure motor. [HON. MEMBERS: "Divide, divide!"] I hope hon. Members will extend some courtesy to me. I do not
very often trouble the Committee. In my view, the greater burden will fall on the commercial motor users whose elected representatives are cordially supporting this new method of taxation.

Mr. J. W. WILSON: I congratulate the Government on the abolition of the Petrol Tax. As a permanent tax it has many great disadvantages. It has been proved to be a bad index. I do not discuss whether the figures laid down for small horse-power and large horse-power are fair; that can come up and can be rectified later. From a British manufacturing point of view, anything like a permanent import tax on petrol, plus an excise tax on all motor spirits, would be disastrous. We know, in chemical industry, how difficult it has been to get progress with any product requiring alcohol, as compared with the product which German manufacturers have made, because of the difficulty we have always had with regard to getting alcohol free from duty. With this spirit any amount of development is possible, and to keep excise officers in all the factories of the country for the sake of keeping it as an index to the use of roads by vehicles seems to me to be hampering the trade of the country in a disastrous manner, and continuing a tax which is most inimical, because this class of tax, namely, an import duty, plus an excise duty, is the most expensive to collect.

Mr. CHARLES WHITE: I want to support the Government for the third time since I have been in this House. I take it that the meaning of this Clause is that the users of the roads by motor vehicles shall pay in some degree commensurately with the damage they do to the roads. To my mind this new tax is the only fair way in which that can be done. I have been a member of a county council or local authority ever since 1890, and I know

something of the damage that is done to the roads, and of the difficulty the county councils have in raising the money to keep those roads in anything like a good state of repair. Only this morning I received a letter from the Clerk of the Derbyshire County Council, of which I was for some years a member. He writes:
I understand that the Finance Bill will be taken in Committee of the House of Commons early next week, and I am authorised by the Chairman of our Highways Committee to communicate with you, drawing your special attention to the fact that, unless some such provision is made as is foreshadowed in the Bill for the taxation of mechanically propelled vehicles, there will probably be a very large diminution in the anticpated grant which will be received by local authorities in connection with the proper upkeep of roads. This, of course, under present circumstances, when the use of the roads by heavy motor vehicles increases almost daily, is a very serious matter, and I therefore venture to hope that you will bear this point in mind when the matter is under consideration by the Committee. The cost to local authorities in connection with the upkeep of roads at the present time is increasing to an alarming extent, and, unless such provision as is foreshadowed is made, it will be practically impossible for local authorities to keep the roads in proper order; and it is for this reason that I ventured to approach you on the subject.
I feel sorry for those motor owners whose only relaxation is a little drive at the week-end. My relaxation is walking at the week-end, and helping to pay for the upkeep of the roads which are used largely by those motor owners. I congratulate the right hon. Gentleman on having included this tax in his Budget, and, for the third time only since I have been in this House, I am going to support the Government in the Division Lobby.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 228; Noes 43.

Division No. 188.]
AYES.
[8.18 p.m.


Adair, Rear-Admiral Thomas B. S.
Blair, Reginald
Carter, R. A. D. (Man., Withington)


Addison, Rt. Hon. Dr. C.
Blake, Sir Francis Douglas
Casey, T. W.


Adkins, Sir W. Ryland D.
Borwick, Major G. O.
Cayzer, Major Herbert Robin


Allen, Lieut.-Colonel William James
Boscawen, Rt. Hon. Sir A. Griffith-
Chadwick, Sir Robert


Astbury, Lieut.-Commander F. W.
Bowerman, Rt. Hon. Charles W.
Chamberlain, Rt. Hn. J. A. (Birm. W.)


Atkey, A. R.
Bowles, Colonel H. F.
Child, Brigadier-General Sir Hill


Bagley, Captain E. Ashton
Breese, Major Charles E.
Clynes, Rt. Hon. J. R.


Baird, Sir John Lawrence
Briggs, Harold
Coates, Major Sir Edward F.


Baldwin, Rt. Hon. Stanley
Broad, Thomas Tucker
Coats, Sir Stuart


Barker, Major Robert H.
Bromfield, William
Colfox, Major Wm. Phillips


Barnston, Major Harry
Brown, James (Ayr and Bute)
Colvin, Brig.-General Richard Beale


Bell, James (Lancaster, Ormskirk)
Bruton, Sir James
Courthope, Major George L.


Benn, Captain Wedgwood (Leith)
Buckley, Lieut.-Colonel A.
Cowan, D. M. (Scottish Universities).


Betterton, Henry B.
Burn, Col. C. R. (Devon, Torquay)
Craig, Colonel Sir J. (Down, Mid)


Bigland, Alfred
Butcher, Sir John George
Davidson, Major-General Sir J. H.


Birchall, Major J. Dearman
Campbell, J. D. G.
Davies, A. (Lancaster, Clitheroe)


Blades, Capt. Sir George Rowland
Carr, W. Theodore
Dean, Lieut.-Commander P. I.


Dennis, J. W. (Birmingham, Deritend)
Johnstone, Joseph
Royds, Lieut.-Colonel Edmund


Donald, Thompson
Jones, Sir Edgar R. (Merthyr Tydvil)
Rutherford, Sir W. W. (Edge Hill)


Doyle, N. Grattan
Jones, Henry Haydn (Merioneth)
Samuel, A. M. (Surrey, Farnham)


Edgar, Clifford B.
Jones, J. T. (Carmarthen, Llanelly)
Samuel, Samuel (W'dsworth, Putney)


Elliot, Capt. Walter E. (Lanark)
Kelley, Major Fred (Rotherham)
Sanders, Colonel Sir Robert A.


Falcon, Captain Michael
Kelly, Edward J. (Donegal, East)
Scott, A. M.(Glasgow, Bridgeton)


Farquharson, Major A. C.
Kenyon, Barnet
Scott, Leslie (Liverpool Exchange)


Fell, Sir Arthur
Kidd, James
Shaw, Thomas (Preston)


Fisher, Rt. Hon. Herbert A. L.
Law, Alfred J. (Rochdale)
Shaw William T. (Forfar)


FitzRoy, Captain Hon. E. A.
Law, Rt. Hon. A. B. (Glasgow, C.)
Short, Alfred (Wednesbury)


Flannery, Sir James Fortescue
Lawson, John J.
Shortt, Rt. Hon. E. (N'castle-on-T.)


Foreman, Henry
Lewis, T. A. (Glam., Pontypridd)
Simm, M. T.


Forestier-Walker, L.
Locker-Lampson, Com. O. (H'tlngd'n)
Sitch, Charles H.


Galbraith, Samuel
Lonsdale, James Rolston
Spoor, B. C.


Gange, E. Stanley
Lunn, William
Stanier, Captain Sir Beville


Gardiner, James
Macdonald, Rt. Hon. John Murray
Stanley, Lieut.-Colonel Hon. G. F.


Geddes, Rt. Hon. Sir E. (Camb'dge)
Mackinder, Sir H. J. (Camlachie)
Starkey, Captain John R.


Gibbs, Colonel George Abraham
Maclean, Neil (Glasgow, Govan)
Stephenson, Colonel H. K.


Gilbert, James Daniel
Macmaster, Donald
Stewart, Gershom


Gilmour, Lieut.-Colonel John
M'Micking, Major Gilbert
Strauss, Edward Anthony


Glanville, Harold James
Magnus, Sir Philip
Sturrock, J. Leng


Graham, W. (Edinburgh, Central)
Mallalieu, F. W.
Sugden, W. H.


Green, Albert (Derby)
Malone, Major P. B. (Tottenham, S.)
Surtees, Brigadier-General H. C.


Green, Joseph F. (Leicester, W.)
Martin, Captain A. E.
Sutherland, Sir William


Greene, Lt.-Col. Sir W. (Hack'y, N.)
Matthews, David
Swan, J. E.


Gregory, Holman
Middlebrook, Sir William
Sykes, Sir Charles (Huddersfield)


Greig, Colonel James William
Moreing, Captain Algernon H.
Taylor, J.


Griffiths, T. (Monmouth, Pontypool)
Mount, William Arthur
Terrell, George (Wilts, Chippenham)


Grundy, T. W.
Murchison, C. K.
Terrell, Captain R. (Oxford, Henley)


Guest, J. (York, W. R., Hemsworth)
Murray, C. D. (Edinburgh)
Thomas, Brig.-Gen. Sir O. (Anglesey)


Hacking, Captain Douglas H.
Murray, John (Leeds, West)
Thomson, T.(Middlesbrough, West)


Hall, F. (York, W. R., Normanton)
Myers, Thomas
Thorne, G. R. (Wolverhampton, E.)


Hallas, Eldred
Nall, Major Joseph
Tootill, Robert


Hambro, Captain Angus Valdemar
Neal, Arthur
Tryon, Major George Clement


Hanson, Sir Charles Augustin
Newbould, Alfred Ernest
Turton, E. R.


Harmsworth, C. B. (Bedf., Luton)
Newman, Sir R. H. S. D. L. (Exeter)
Waddington, R.


Haslam, Lewis
Nield, Sir Herbert
Wallace, J.


Hayday, Arthur
Parry, Lieut.-Colonel Thomas Henry
Walton, J. (York, W. R., Don Valley)


Henderson, Major V. L. (Tradeston)
Peel, Col. Hn. S. (Uxbridge, Mddx.)
Ward, Col. J. (Stoke-upon-Trent)


Henry, Denis S. (Londonderry, S.)
Perkins, Walter Frank
Warren, Lieut.-Col. Sir Alfred H.


Herbert, Dennis (Hertford, Watford)
Pickering, Lieut.-Colonel Emil W.
Waterson, A. E.


Hewart, Rt. Hon. Sir Gordon
Pilditch, Sir Philip
White, Charles F.(Derby, Western)


Hinds, John
Pinkham, Lieut.-Colonel Charles
Whitla, Sir William


Hirst, G. H.
Pollock, Sir Ernest M.
Wignall, James


Hohler, Gerald Fitzroy
Prescott, Major W. H.
Williams, Aneurin (Durham, Consett)


Holbrook, Sir Arthur Richard
Pretyman, Rt. Hon. Ernest G.
Williams, Lt.-Com. C. (Tavistock)


Holmes, J. Stanley
Rae, H. Norman
Williams, Col. Sir R. (Dorset, W.)


Hood, Joseph
Raffan, Peter Wilson
Williamson, Rt. Hon. Sir Archibald


Hope,Sir H. (Stirling & Cl'ckm'nn'n,W.)
Ramsden, G. T.
Willoughby, Lieut.-Col. Hon. Claud


Hope, James F. (Sheffield, Central)
Randles, Sir John S.
Wilson, Rt. Hon. J. W. (Stourbridge)


Hopkinson, A. (Lancaster, Mossley)
Reid, D. D.
Wilson, Colonel Leslie O. (Reading)


Hotchkin, Captain Stafford Vere
Remer, J. R.
Wood, Sir H. K. (Woolwich, West)


Hunter-Weston, Lieut.-Gen. Sir A. G.
Renwick, George
Woolcock, William James U.


Hurd, Percy A.
Richardson, Sir Albion (Camberwell)
Worsford, D. T. Cato


Inskip, Thomas Walker H.
Richardson, R. (Houghton-le-Spring)
Yeo, Sir Alfred William


Irving, Dan
Roberts, Rt. Hon. G. H. (Norwich)
Young, Robert (Lancaster, Newton)


Jackson, Lieut.-Colonel Hon. F. S.
Roberts, Sir S. (Sheffield, Ecclesall)
Younger, Sir George


James, Lieut.-Colonel Hon. Cuthbert
Robertson, John



Jephcott, A. R.
Robinson, S. (Brecon and Radnor)
TELLERS FOR THE AYES.—


Jesson, C.
Rodger, A. K.
Lord E. Talbot and Mr. Parker.


Johnson, Sir Stanley
Royden, Sir Thomas



NOES.


Agg-Gardner, Sir James Tynte
Gritten, W. G. Howard
McLaren, Robert (Lanark, Northern)


Balfour, George (Hampstead)
Gwynne, Rupert S.
Moore-Brabazon, Lieut.-Col. J. T. C.


Barnes, Major H. (Newcastle, E.)
Hall, Lieut.-Col. Sir F. (Dulwich)
Norris, Colonel Sir Henry G.


Bell, Lieut.-Col. W. C. H. (Devizes)
Hayward, Major Evan
Raper, A. Baldwin


Billing, Noel Pemberton-
Herbert, Hon. A. (Somerset, Yeovil)
Robinson, Sir T. (Lancs. Stretford)


Bramsdon, Sir Thomas
Hickman, Brig.-General Thomas E.
Rutherford, Colonel Sir J. (Darwen)


Brittain, Sir Harry
Hodge, Rt. Hon. John
Seddon, J. A.


Carew, Charles Robert S.
Hopkins, John W. W.
Wedgwood, Colonel J. C.


Clough, Robert
Joynson-Hicks, Sir William
Wolmer, Viscount


Cooper, Sir Richard Ashmole
Kenworthy, Lieut.-Commander J. M.
Wood, Sir J. (Stalybridge & Hyde)


Cope, Major Wm.
Kiley, James D.
Yate, Colonel Charles Edward


Cory, Sir C. J. (Cornwall, St. Ives)
Lister, Sir R. Ashton



Craig, Captain C. C. (Antrim, South)
Lloyd, George Butler
TELLERS FOR THE NOES.—


Davies, Thomas (Cirencester)
Locker-Lampson, G. (Wood Green)
Captain Ganzoni and Viscount


Gould, James C.
Lorden, John William
Curzon.


Greer, Harry
Lort-Williams, J.



Question put, and agreed to.

CLAUSE 12.—(Duty on licences for mechanically propelled vehicles.)

(1) Any excise duty which is chargeable at the commencement of this Act in respect
of any vehicle which is chargeable with duty as a mechanically propelled vehicle under this Section shall cease to be chargeable as from the first day of January, nineteen hundred and twenty-one, and on and after
that date there shall be charged, levied, and paid in Great Britain and Ireland in respect of mechanically propelled vehicles duties of excise at the rates specified in the Second Schedule to this Act.

(2) The duties charged under this Section shall be paid annually upon licences to be taken out by the person keeping the vehicle:
Provided that—

(a) a licence may be taken out in respect of any mechanically propelled vehicle (other than a cycle, or a tramcar, or a vehicle on which a duty of five shillings is chargeable under this Section) for one-quarter of the year only beginning on the first day of January, the first day of April, the first day of July, or the first day of October, and in the case of any licence so taken out the duty shall be thirty per cent. of the full annual duty; and
(b)where a person commences to keep or use a vehicle to which the foregoing proviso does not apply on or after the first day of October in any year, he shall, on delivering a declaration in writing signed by him to that effect, be entitled to take out a licence for that vehicle in payment of one-half of the full annual duty.

(3) The unit of horse-power for the purpose of any rate of duty under the Second Schedule to this Act shall be calculated in accordance with Regulations made by the Minister of Transport for the purpose.

(4) No duty shall be payable under this Section in respect of fire-engines, vehicles kept by a local authority while they are used for the purposes of their fire-brigade service, ambulances, or road rollers.

(5) The Minister of Transport may make regulations providing for the total or partial exemption for a limited period from the duty payable under this Section of any vehicle brought into the United Kingdom by persons making only a temporary stay in the United Kingdom.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): I beg to move, in Sub-section (2a), to leave out the words "first day of April," and to insert instead thereof the words "twenty-fifth day of March"
The part of the Clause with which we are dealing gives a concession in respect of certain owners of vehicles, enabling them to take out quarterly licences at a little higher charge. The rates, which are mentioned in the Clause as it at present stands, are January, April, July, and October. The reason for suggesting the charge from 1st April is not an imaginary but a real one. The fact is, that Easter
comes particularly early next year, Easter Monday being 28th March, and representations having been made to the Ministry that there may be owners of vehicles who desire to use them, particularly hackney carriage vehicles, for the Easter holidays, they would not be able to take out the appropriate quarterly licence if it stood at 1st April. This will not occur again till 1940, when it is believed the present Minister will not be troubled with the matter.

Amendment agreed to.

Mr. NEAL: I beg to move in Sub-section (2, b) to leave out the words "vehicle to which the foregoing proviso does not apply" and to insert instead thereof the words "cycle or tramcar."
The effect of the Amendment is to prevent there being a reduction of the 5s. duty by one-half. The Clause enables persons who own vehicles for the first time in the latter half of the financial year to take up a licence at half duty. The 5s. duty is only really the registration fee, and it is not thought that it would be right to reduce that to 2s. 6d.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. MOUNT: Could the right hon. Gentleman tell us whether the collection is to be by the local authorities? If so, will consideration be given to the local authorities? Considerable grievance is felt by the local authorities, county councils and others, regarding the cost of collection of licence duties, and if this cost is to be added to it, it is urgently necessary that some consideration should be given to them.

Sir E. GEDDES: The question is one of considerable importance. The collet tion throughout will be by the local authorities, and every penny of the cost of collection will be refunded. That has been allowed for in the figures which have been given.

Mr. MOUNT: How will it be repaid?

Sir E. GEDDES: Out of the proceeds of the taxes.

Mr. MOUNT: Will it be paid without delay, because in many cases the county councils have to finance the Government out of their own money for some time
and at the present time when rates are very high and the balances of the county council are very low it is important that there should be as little delay as possible in repayment.

Sir E. GEDDES: Certainly they will be repaid with as little delay as possible, and, having regard to the extensive and close relations which exist between the Department and the local authorities, I do not think there can be very much ground for complaint. We feel that the amount which has been allowed is adequate to cover the expenses.

Sir R. COOPER: I should like to know whether under Sub-section (3) the power which is given to the Ministry of Transport to make Regulations for determining the unit of horse-power upon which the tax is to be levied is unlimited. Is there any limit to the Regulations which the right hon. Gentleman might make, because it is quite within his power under this Sub-section to alter the formula on which horse-power is calculated, and he might if he wished actually double the tax levied by this Finance Bill. That is too wide a power to give to any Government Department. There is no accounting for what the Government Department will do at any time, and we ought not to allow them to be able to make a very material increase in the horse-power and thereby increase the tax levied by this House.

Sir E. GEDDES: I quite agree that my hon. Friend's point is important. There was an Amendment down which dealt with this point, but it has not been moved. The powers that are given here are identically the powers which have hitherto been held by the Treasury, and they are unlimited. Whereas the Treasury tax was a very much lower one the power was correspondingly less, and had the Amendment which deals with this point been moved I was going to suggest that it would be obvious to the Committee that we cannot deal with this tax without legislation after the recess, because we have to have an administrative Bill as well as this Finance Bill. There are a great many things that have to be done for which administrative authority will have to be given. I shall propose there that we should arrange some procedure by which reasonable safeguards might be introduced. There might be compulsory consultation with the Advi-
sory Committee before any change is made. For the hon. Member's satisfaction I may say that I should deplore in the interests of the motor trade of the country any interference for a considerable time with the method of assessing horse-power because it would upset the whole of the manufacturing industry.

Captain W. BENN: I understand that we are now changing the method of collection of these duties and that involves laying on the local authorities the duty of collecting them, and the charges that they have to meet in collecting the taxes will be refunded. Has the Chancellor of the Exchequer considered in making this change the question of Ireland. We know quite well that in a large number of counties in Ireland it is to be feared that the local authorities will refuse to collect these taxes. If that be the case what steps can the right hon. Gentleman take or what steps will he take? Even in that disturbed country it is easier to collect taxes in the old form, not that I approve of it. You have to collect this duty through the medium of the local authorities and something like 29 out of Hie 33 county councils have refused service in this and in other respects.

Sir E. GEDDES: The difficulty is one which I believe will solve itself. I am glad to say that even in the disturbed condition of Ireland there has been one bright spot and that is, that since the Ministry of Transport was formed, we have got on well with the local authorities. That may be a justification for the Ministry of Transport. The chief reason why I have not much fear about the collection of these taxes is that if the local authorities refuse to collect them they will not get any grant for their roads. They are to collect money which is to be distributed amongst them, and if they do not collect it, obviously, they will not get any grant. If any local authorities in Ireland refuse to collect the money they cannot expect any grants, and I think that will solve the difficulty.

CLAUSE 13.—(Income-tax for 1920–21.)

(1) Income Tax for the year 1920–21 shall be charged at the rate of six shillings.

(2) All such enactments relating to Income Tax as were in force with respect to duties of Income Tax granted for the year 1919–20 shall have full force and effect with respect to any duties of Income Tax granted by this Act.

(3) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B, or of Inhabited House Duty, for the year 1919–20, shall be taken as the annual value of that property for the same purpose for the year 1920–21; provided that this Sub-section—

(a) so far as respects the duty on inhabited houses in Scotland, shall be construed by reference to a year of assessment ending on the twenty-fourth day of May instead of on the fifth day of April; and
(b) shall not apply to lands, tenements, and hereditaments in the administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is, by that Act, made conclusive for the purposes of Income Tax and Inhabited House Duty.

Sir D. MACLEAN: Before any Amendments are called on this Clause, might I ask whether the Chancellor of the Exchequer intends to proceed with the Bill after 11 o'clock to-night? If he does not, I imagine from what I see on the Paper that to-morrow will be fully occupied with the disposal of the important points regarding Income Tax, and that will leave the Excess Profits Duty on Clause 40 to be dealt with on Monday. Perhaps it will be for the convenience of the Committee for the Chancellor of the Exchequer to tell us what are his ideas on the subject.

Mr. CHAMBERLAIN: I am rather the victim of circumstances. I could not get a full day yesterday, and I do not propose to, and indeed I could not, go beyond 11 o'clock to-night, as the Report on the Financial Resolution and other urgent matters, to enable the House to proceed with other legislation, must be dealt with. If the Excess Profits Duty were reached early to-morrow we might take one of the main issues in good time, but if, as I think very likely, that cannot be done, then I would suggest to the Committee that we should not sit late to-morrow night after 11, but we should finish the Income Tax and Stamps, on which there is very little to be said, and postpone the Excess Profits Duty and the Corporation Profits Tax until Monday, when we shall resume our discussion, but finish up the odds and ends to the end of the Bill which are correlative to other matters, the few Clauses and Schedules which apply to matters already dealt with. I think it would be for the convenience of the Committee not to take time to-morrow on
the Excess Profits Duty or Corporation Tax unless it is reached at an early hour. But if it is convenient I hope the Committee will facilitate me—I can only do it with their permission—in the postponement of the Excess Profits Duty and the Corporation Tax Clauses, so that we may proceed with the other minor matters.

Captain W. BENN: The right hon. Gentleman has referred to minor matters, but there is one matter relating to the land duties and the return of the land duties which have been already paid, to which we take the very greatest exception, and which we shall debate at whatever length we think proper.

Mr. CHAMBERLAIN: Quite so. All I am suggesting is that it would be for the convenience of the Committee not to begin the Excess Profits Duty Debate, say at dinner time to-morrow. But I can only do that if the Committee consents to go on with other business in connection with the Budget. If my hon. Friend says that it is the general opinion that we should not interrupt the business at all, but must postpone the Budget altogether, I could not accept that, and would have to go on with the Excess Profits Duty, but I believe that the proposal which I have made—I do not ask for a pledge to-night—will be for the general convenience of the Committee.

Sir R. COOPER: Are we to understand that, so far as possible, it is the intention that the Division on the Excess Profits Duty, the main question, will be taken on Monday night? It is an extremely important Division, and it would be for the convenience of Members if they could be told if it is the intention of the Government to try to get that Division on Monday night.

Mr. CHAMBERLAIN: Certainly it is my wish that it should not be later than Monday night, and I hope that we shall in good time—I should have thought before dinner time rather than the last thing on Monday night—come to a decision on the question of whether there is to be an Excess Profits Duty or not. I cannot deal with the Bill according to my own sweet will; I can only make a proposal which, I believe, will meet with the convenience of the Committee, but if any considerable section objects to it, I cannot persist.

Lieut.-Colonel J. WARD: May we take it for granted that the proposal of the right hon. Gentleman is not being accepted by the other side, and therefore the best course to pursue is to proceed with the Bill as fast as we can?

Mr. A. Hohler: The following Amendment stood on the Order Paper in the name of
at the end of Sub-section (2) to insert the words
Provided always that, for the purposes of Schedule D, the tax shall be computed upon the year ending on that day of the year immediately preceding the year of assessment instead of upon a fair and just average of three years as required by the said Schedule.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): The Amendment in the name of the hon. Member for Gillingham is not in order, as it would impose a new charge. The next Amendment also is out of order.

Question proposed, "That the Clause stand part of the Bill."

Mr. HOHLER: May I point out that this is not a new charge.

The DEPUTY-CHAIRMAN: I am advised that it would impose a new charge, but, if it did not mean a new charge, it would come in as a new Clause, and that would be the time for the hon. Member to raise his point.

Lieut. - Commander KENWORTHY: This Clause deals with one of our main sources of revenue, the 6s. Income Tax. I know that there are a great many exemptions for which taxpayers are very grateful, and I hope that there will be more, but this 6s. Income Tax shows what imperialism has meant for the taxpayers of this country. We are very proud of ourselves at this moment. We stand facing the world and boast of our great possessions, and the way in which they have increased during the last five or six years, but we have got to pay for it, and I hope that hon. Members will remember, and that it will be pressed upon us from the Treasury bench when we are told we can afford this, that and the other adventure, what this 6s. Income Tax means to the great mass of Income Tax payers in the country. We can paint more of the map red, but our policy or what passes for policy in the Near East, in Mesopotamia in particular, is going to mean another shilling on the Income Tax
before we are many months older, and I should not be surprised if, in a new Budget, the Chancellor of the Exchequer has to raise the Income Tax by another 1s. That thought should make even the most imperialistic minded of us pause before urging the Government on to further adventures at the expense of the British taxpayer.

Mr. HOHLER: Why should we not have this Amendment which does not involve any charge at all?

The DEPUTY-CHAIRMAN: The hon. Member can only speak on the question that the Clause stand part of the Bill.

Sir R. COOPER: Might I point out that the proposal of my hon. Friend might have the effect of a reduction.

The DEPUTY-CHAIRMAN: I cannot go back on that. The question is, "that the Clause stand part of the Bill."

Mr. HOHLER: I object entirely to this Clause. It is founded upon the old system of ascertaining the average upon which income tax is to be assessed. That has been reported against by the Royal Commission. Under the present law the averages are ascertained on what the profits were in the years 1917–18, 1918–19 and 1919–20. Everybody knows, and the Chancellor of the Exchequer has admitted it in an answer to a question, that every year the amount of money coming in for review under Income Tax is steadily increasing. If you are really honest in your desire to get money, instead of introducing a new tax like the Corporation Profits Tax, why do you not avail yourselves of this opportunity? The year 1917–18 is about the worst for Income Tax average that you could possibly take. It was a year when the War was in full swing, when, comparatively speaking, no one was doing any trade at all. Why bring that into the average? The same remark is equally true of 1918–19. It was in 1919–20 that people were making the profits, and unless those profits are hit now they will never be hit at all. I have discussed this matter with people well qualified to speak on the subject. Why not make this change? If the Chancellor of the Exchequer omits this opportunity, people who have made the profits have only to retire from business and they cannot be got at at all. We see in the paper every day that so-and-so intends
to retire. He will walk away with his profits and they will never be touched by taxes at all. That is what the Chancellor of the Exchequer is doing by failing to introduce such an Amendment as I have on the Paper, which has been ruled out of order. You have this Corporation Profits Tax, which is going to do great injustice to a lot of small people with a very small income, and yet you have at hand the recommendation of a Commission as to which we were told last April that the Chancellor of the Exchequer intended to introduce a Bill making it law. Why is it delayed? We have been told that we are in great financial difficulties, and yet the mere alteration in the method of assessing the tax the Chancellor of the Exchequer will not introduce. A merit of it is that ultimately you will get more money. You will always be able to say to the man, "You have just made this money and you can afford to pay. I am going to assess you only for your income of the preceding year." It is my desire to have such a man subjected to the highest possible tax. Such people have made enormous profits out of the War and are making enormous profits now out of the inflated prices they are charging the public. It sometimes occurs to me that this Finance Bill has been delayed so that the returns which were due on 30th June may have gone in before there was a chance of raising this point. If in order to make the change the Amendment must be moved by the Government I hope there will be something done on Report to deal with the matter. I am told that millions are at stake.

9.0 P.M

Mr. CHAMBERLAIN: I am always sorry when an hon. Member thinks it necessary, not merely to criticise the action of the Government, but to impute disgraceful and discreditable motives to them. I really think my hon Friend, on reflection, would not wish to repeat the imputation he has just cast on the Government. He suggests that the Government or I—I do not know which—had purposely delayed the Budget in order that some people who ought to pay taxes, or who, he thinks, ought to pay taxes, should escape. No one suffers more from delay in proceeding with the Budget than the Chancellor of the Exchequer. That is within the knowledge of us all. If you introduce the Finance Bill and then delay further proceedings on it,
everybody who has had any experience knows that for the Minister in charge that means infinite trouble and difficulty. If I have consented to that great sacrifice it has been in the general interests of the business of the Government, and it was, in the first instance, in the particular interest of making serious progress with the Bill for the Government of Ireland, which has occupied so much of the time of the House. My hon. Friend's object is to secure by a change of system from certain people a larger payment than they have been called upon to make hitherto. My hon. Friend has justified amply the ruling of the Chair on a point of Order, for if the object is to get more money from people, then clearly it does impose a charge. That is my difficulty. He says I have had plenty of time to deal with it—almost a year. The Report of the Royal Commission is dated March. I have had none too much time to give to its consideration, even since that date, which is not half a year ago. I have had all too short a time to enable me and my advisers to frame a Bill recasting the whole basis on which Income Tax is levied. I wanted to make the change from the three-years' average to one year, and I was particularly anxious to do it in this Bill and I said, in carrying through a large portion of the changes recommended by the Royal Commission, can I not also get rid of the three-years' average? The first answer I received was that I should require 15 Resolutions on which to found the Clause necessary for that purpose. I hope that nothing like that number will be necessary, but it was not possible in the time which I had at my disposal to take the measures necessary, nor is it possible for the Revenue authorities to bring this great change into effect this year. I really hope that my hon. Friend, seeing that I am anxious to do what he wishes and understanding now the reasons why I have not done it, will not say that we refrained from doing it in order to let people who ought to pay escape.

Mr. HOHLER: I withdraw no imputation. I say advisedly that the Government for months were aware of the fact that this would produce more revenue to the country. I say further that the matter was before the Commission at quite an early stage, and my recollection is when it was referred to we were told that a Bill to deal with these matters referred
to in the Report was to be introduced this Session. Of course, I accept anything the Chancellor tells me, and that he is advised that all these Money Resolutions are requisite and that it would be impracticable to do it this year. I put a question to him on the subject some time ago, and on the part of the question which asked him whether or not he had been advised that it was possible and practicable there was no answer. Notwithstanding the suggestions as to that which is creditable or discreditable, I say it is a great shortcoming on the part of the Government that they have not done this thing at a time of great need of money and when it must be apparent that you are allowing men who made large fortunes to escape because they can retire and they can never then be assessed on their profits under Schedule D. I deeply regret that the change has not been made as I think it would have been productive of a very large sum of money. I am at a loss even now to understand why the country should not have the large revenue which could be obtained from those who made large fortunes during the War. If the House had been asked to spend a little further time on the Resolutions I think it would have done so. It is the fact that this Finance Bill is now introduced when it is practically impossible or very difficult to make this alteration as the period for the return of the Income Tax is the 30th of June.

Captain W. BENN: I think everyone will agree that the Finance Bill has been deferred too long, and to a time in the Session when Parliament is least effective. The reason given by the Chancellor why it was postponed seems to be the worst of all reasons. He told us that it was in order that we might make progress with another measure for which I have very little respect. This, I think, is the appropriate occasion to ask about the yield of the Income Tax in Ireland. We know that in Ireland some of the fiscal machinery, offices, papers and so on have been destroyed, and under those circumstances I would ask what steps have been taken to secure a full return of the tax. What has been the result of the destruction of those offices and the burning of the returns on the Income Tax, and what has been the falling off for that reason? What other steps does the right hon. Gentle-
man propose to make this tax as effective in Ireland as it is in Great Britain?

Colonel WEDGWOOD: I am not quite certain what was the nature of the imputation made by the hon. Member the Member for Gillingham (Mr. Hohler), but I hope I shall not be accused of making any imputation. I should like to know is there any means of getting Income Tax out of bonus shares. Nowadays every well-regulated company does not increase its dividends, but issues either bonus shares or shares on discount, and the happy holder of the shares gets income either by selling those shares or receiving the increased dividend. This practice spread during the War, and has now grown apace. Are the Government taking any steps to meet that form of income through the Income Tax? If the tax is to be, as it has become, the sheet anchor of our finance, it behoves us to make it water-tight. At present it is nothing of the kind, and you have an increasing feeling in the country that the Income Tax is monstrously unfair in that certain people who realise great incomes escape, whereas other people less fortunate or less agile are forced to pay the tax. As long as the tax was a shilling in the pound it did not very much matter whether people escaped or not, but now it is far more important that the tax should be equitable and should fall upon the just and unjust. I have no affection for the Income Tax, but if it is to carry the support of the people you must persuade them that it is not being evaded right and left by wealthy people. The taxes as now evaded by people increasing their capital value in lieu of taking dividends and so increasing their income. There is one part of Clause 13 which I would like to ask a question about. In Sub-section (3) it is specifically stated:
The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A and B, or of Inhabited House Duty, for the year 1919–20, shall be taken as the annual value of that property for the same purpose for the year 1920–21.
That is an illustration of what I have been trying to point out. The value of property has risen. That is to say, its value has appreciated in comparison with the nominal value of the £. In that way the value of all real-estate has risen. In
these circumstances I want to know why we should make this specific Order about this class of property. Especially, why should that be so, seeing that in the Administrative County of London the same treatment is not meted out? It is treated on its present basis for Income Tax. I should like to have it explained why the value of real-estate in London should be taken at the present value instead of at the old valuation. That is one of the things that leads people, without any attribution of motives, to ask why certain interests are more lightly treated than others. An ordinary employé if he gets a rise of salary has to pay on the increase in his salary, but the owners of real-estate escape to a certain extent because a special proviso is made for them. I want to know, therefore, whether it is not possible to bring into the ambit of the Income Tax the increased capital value of shares issued at a discount, and also why an exception is made in the case of real-estate which is to be taxed on the 1919–20 value instead of, as in London, at the 1920–21 value.

Sir HALFORD MACKINDER: The question of bonus shares occupied the minds of the members of the Royal Commission on the Income Tax, and I think it would be much better to leave this question over to a future Finance Bill, which would deal with all the general recommendations of the Royal Commission, than to attempt to deal with it now in the present Finance Bill. It is an extraordinarily difficult question. When you look into it, you will find that there are cases in which it would be grossly unjust to charge Income Tax on bonus shares. The general principle of the Income Tax is that for one enjoyment there should be one taxation. Often the increase in share value is against a writing down of reserve, that reserve having been accumulated out of profits that have paid Income Tax already.

Colonel WEDGWOOD: It is a revaluation of the property, instead of an increase of the reserves.

Sir H. MACKINDER: I only mentioned that to show the complexity of the question of bonus shares, and I was saying that in some cases it would be grossly unjust to attempt to tax such shares when they represented a reserve which was applied to an increase in the nominal
value of the capital. No doubt it would be justifiable in certain circumstances, but it would be unjust to attempt to tax a second time that which had already paid Income Tax. Then another complexity is introduced, owing to the variations in the rate of Income Tax. In past years the Income Tax was low, and in those years reserves were accumulated, but now, when the Income Tax is high, and you are distributing these reserves, they may have to pay upon a higher rate. The tax may fall in the future. If new shares are thus distributed, it may be from a reserve which has originally paid a higher rate of Income Tax. The issue of these shares may be in some cases unjustifiable, where it is simply a case of inflation of capital but again, it must be remembered that if you increase the capital you reduce the dividends which are payable, and if you increase the capital unjustifiably, a lower rate of profit will be made upon the nominally larger capital, and thus there will be lower dividends. It really is part of a much larger question of taxation, and that is the taxation of casual profits which do not occur annually. The whole question is one which the Income Tax Commission, in the year at their disposal, were not able to exhaust, and in their Report, while they indicated certain principles, they did not attempt to deal with the many possible cases, or with the remedies that were suggested, because some of these would have been unjust in their application. I therefore think the whole question should be left over for another Finance Bill, where ample consideration could be given to it, and when we can deal also, not merely with the altered rates of the Income Tax, but also with the many alterations of the law which have been recommended in the Report of the Commission.

Mr. W. GRAHAM: I feel compelled to ask a question which touches on some of the points raised by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) and the hon. Member for Camlachie (Sir H. Mackinder). A great deal has been said about the question of evasion of Income Tax. I am expressly dissociating myself from the criticism adopted by the hon. and learned Member for Gillingham (Mr. Hohler), because he was asking for a scheme for the reconstruction of the
Income Tax, such as should not be attempted within the limits of the present Bill. The labours of the late Royal Commission should be a matter, if not for prolonged, for anxious and careful, inquiry by the House. I think that his contention is quite ill-founded, especially in the light of our experience, but I am bound to ask the Chancellor of the Exchequer, while some of us agree that it is quite impossible now to put forward a scheme, whether he cannot introduce something into the Bill, or at an early date, to deal with the question of evasion. I am aware that some authorities have derided the idea that there is evasion of the Income Tax and the Super-tax on a large scale year by year in this country. I do not think that that idea can be supported in view of what was stated before the Royal Commission on the Income Tax. I know there was one estimate which seemed to be extravagant—that £100,000,000 per annum was lost in that way. I do not think that that can be supported by anyone who is acquainted with the facts, but there was another estimate which was given by the Society of Tax Surveyors, and that was that in recent times in Great Britain there have been a loss of £100,000,000, which might have been collected if there had not been evasion and if better provision to check it had been made in the way of administrative machinery, which ought to have been devised in a country like this for preventing loss of that kind.
That was one estimate, £100,000,000 in a comparatively small number of years, but I think the standard estimate, if I may so call it, which was taken was one which placed the annual loss at anything between £5,000,000 and £10,000,000, and I remember that in another part of our Report we made it plain that possibly another £10,000,000 could be obtained annually by the provision of the machinery which I have just described and by better means being adopted for the checking of evasion. This, I am afraid, applies not merely to Income Tax, but also to Super-tax, and raises large issues of the bonus shares and other forms of fictitious or evasive distribution which are habitually engaged in either for the purpose of evading Income Tax or Super-tax, or, at all events, for the express purpose of reducing the liability under that head. I think my right hon. Friend will agree
that, of course, that requires machinery, and it requires the detailed consideration of the Bill which I understand will be forthcoming comparatively soon, but I wish to ask whether on this Income Tax Clause it is not possible to devise something perhaps rather sooner than the rest of the machinery by which the question can be tackled. I am rather afraid that if it is postponed until the definite machinery is established that we have in mind, much of the money will be irrecoverable, and we should like to see it obtained for the State at the present time.

Mr. PRETYMAN: I wish to say one word in reply to the point raised by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood). I believe we are discussing Clause 13, which deals with Income Tax, and I cannot help thinking there is some confusion in his mind between Income Tax and Super-tax. It is perfectly clear that the question of bonus shares does not arise upon Income Tax.

Colonel WEDGWOOD: It ought to do so.

Mr. PRETYMAN: No. What is Income Tax charged upon? It is charged upon the full profits made by any company, and when those profits are made they are charged in the year that they are made and irrespective of their subsequent destination. If those profits go into reserve or into any other fund which the company may create, they go after being charged and after having paid at the appropriate rate, and I cannot follow my hon. Friend in saying that it matters that that rate might be different from the rate at which they may subsequently be appropriated to bonus shares. The time at which those profits should be paid is the time at which they are made, and if the company subsequently chooses to turn its reserve fund into bonus shares it is dealing with money which has already paid tax and is therefore quit of any further payment.

Colonel WEDGWOOD: If you take up shares paid for at par when the actual market value is 30 or 40 and sell your rights, surely that is a form of income. Instead of paying out in increased dividend on your shares, all you have to do is to issue fresh shares to your shareholders pro rata and allow those shareholders to sell their rights.

Mr. PRETYMAN: When the shares of the company are sold the market is perfectly aware of all the assets of that company, and the company may juggle with its assets as it likes and distribute them as it likes. The point we have to consider is that whatever profits that company makes should pay Income Tax to the full amount during the year that those profits are made. When that has been done there is nothing more matters from the point of view of Income Tax. The question that the hon. and gallant Member raises does not arise on Income Tax at all, but on Super-tax. That has been discussed before the Income Tax Commission and will no doubt be considered in its yroper place by the Chancellor of the Exchequer and dealt with in a later Bill, but it is really, if I may say so without offence, a mare's nest to raise this question of bonus shares on the Income Tax, because it does not arise.
In respect to what the hon. Member said about the valuation of land, I think he is also under a misapprehension there. The reason we had put before us in evidence why you take the valuation for the last year as the basis of the taxation of land is because it is the latest date available, and you cannot take a valuation for the current year. The London valuation is not taken on this year but on the quin-quennial valuation, because there is a special Act. The London valuation is under a special quin-quennial valuation, and so far from being more up-to-date, it is actually less up-to-date. That, I think, is another mare's nest. I think everybody would agree that we want to deal with evasion as promptly as possible, but there is no royal road by which it can be done. We had a great deal of detailed evidence on innumerable points of evasion before the Royal Commission, and it is all a question of detail, and I do not think it is possible to deal with it by one broad stroke of a brush in a clause of this kind. Bad as it may be to delay for a few months this very important question, it is essential that the matter should be carefully and accurately dealt with, and I think we shall all agree that we do not want to see that the time that the Royal Commission gave in going into this subject shall be wasted by dealing with the question in a haphazard way. We have made definite and detailed proposals on all these points, which I hope will be brought before the House at a later stage. It is very im-
portant that all the members of the Royal Commission in this House should, as far as possible, express the same views, as they have signed the same Report, and I hardly think my hon. Friend would wish to press the Chancellor to depart from the considered and definite proposals that we have made in order to deal with this question in a haphazard manner.

Mr. CHAMBERLAIN: The hon. and gallant Member for Leith (Captain W. Benn) asked me for an estimate of the loss that might accrue in Ireland owing to the unlawful and disorderly acts which have occurred there. I cannot venture on any estimate of value at the present time, but I have myself put a new Clause down in order to make more efficient or to make possible the collection of Income Tax in cases where otherwise, owing to what has happened, it might escape. As regards the valuation, that is one of the many questions that were considered by the Royal Commission. I speak in the presence of at least three members of that Commission, and I am sure that they will confirm me when I say it would be madness for me to attempt to carry out, and impossible for any Chancellor of the Exchequer effectively. to secure, in a Finance Bill, which necessarily has to deal with a great many other matters, all the Amendments which are suggested by the Royal Commission. On this particular matter of valuation they make proposals for augmenting the staff and for spreading the work of revaluation over a period of years, thus avoiding, to use their own words, "an unjustifiable strain on the Department." With the staff and accommodation at disposal, and with the work to do in the current year, it would have been quite impossible to attempt anything in the nature of a general revaluation in the current year. It could only have resulted in disastrous failure.

Colonel WEDGWOOD: Is there any chance of getting a revaluation?

Mr. CHAMBERLAIN: Yes, I hope so. With patience and perseverance a great deal may be done. It is a platitude, but it is a platitude which I have to state, because some people forget it. You cannot do everything in a moment. You can destroy anything in a moment, but you cannot build and construct in haste, if your building is to stand the stress
of time. That is really the answer to the appeal which has been made. Evasion of tax or avoidance of tax takes many forms, some reprehensible, others not reprehensible, so long as the law protects them. I use the word "evasion" for not paying taxes you ought to pay; I use the word "avoidance" for adopting measures which Parliament permits you to adopt and which render you not liable. If, for instance, Parliament taxes beer, and you wish not to pay the tax, you avoid it by not drinking beer. If, on the other hand, a brewer on anyone smuggled beer without paying the tax, if such a thing were possible, that would be evading the tax, and would be illegal, immoral, and reprehensible. But there is every degree between the two, only from the point of view of law, remember the law construes a taxing statute strictly, and always in favour of the subject. It is not a simple matter to pick up all these possible methods of avoidance or evasion. It is most complicated. It requires an infinite series of expedients to meet them, and some require a great deal of consideration before you adopt them. The particular method which has been under discussion, that the tax should be levied according to an appreciation of the motive for which action is taken by the taxpayer, is a very difficult thing to judge. To say that if a man does so and so he shall be taxed is one thing, but to say whenever he does it with some motive is a proposition which, before you adopt or can put into a statute, needs a great deal of consideration.
No one would dispute that it would not be possible in a Finance Bill to deal with so many propositions as we have heard, unless the House were prepared to pass all the rest of the proposals sub silentio. Under those circumstances, and there having been no time either for the Board of Revenue or myself to produce the reform, I have been obliged to postpone that to a later date. I had hoped to introduce it before now, but circumstances have made that impossible. The Inland Revenue and the others who will have to co-operate with me will try to prepare a Bill carrying out, or submitting to the House, the general recommendations of the Income Tax Commission, in so far as the Government find it possible to adopt them, at the earliest
moment we can; but I do beg the House, in a matter so complicated, so intricate, and fraught with such serious consequences, to give us time to make, if we can, a reasonable, ship-shape, and watertight measure. If they hurry us too much they will have bad workmanship.

Sir F. BANBURY: I should like to support my right hon. Friend the Member for Chelmsford (Mr. Pretyman) in the very clear statement he has made, correcting, if I may say so, the mistake into which my hon. and gallant Friend opposite has fallen. Let me point out that bonus shares, as he calls them, are merely the capitalising of the reserve, and issuing that reserve which has been capitalised in the form of such shares, and that reserve when issued has paid Income Tax on every possible occasion. Therefore there is no evasion of any sort or kind. I have seen in some financial papers the statement that railway companies ought to issue bonus shares—what for, I never could see, because their reserves have not been large enough to enable them to part with them and capitalise them. But on every shilling of reserve they have already paid Income Tax, and therefore instead of distributing the reserve at the time it was earned in the form of dividends, they have been prudent enough to put it by for a bad day—a practice which ought to be encouraged, and not discouraged. The tendency, so far as I know, of all public companies is that they are too apt to declare large dividends and are disinclined to put money to reserve. The hon. Member opposite said something about revaluation. I did not quite follow what that meant. If the hon. and gallant Gentleman means that a company's plant and freehold buildings and land have increased in value, and that they divided what they thought was the then value between what they gave for it and the then value, it could never be liable to Income Tax. It is an increase of capital value. Those cases, so far as I know, are very, very rare. There may have been one or two cases, but, if so, it merely means that their capital value has increased and therefore never was liable. I also agree with my right hon. Friend that there might be something in private companies—not public companies—where three or four people have formed themselves into a company and in that way evaded the
Super-tax. That is done, as I happen to know. I do not mean to say I have done it myself. That is what I think my hon. Friend has got into his head. But that does not arise on this particular proposal. With regard to the other question about the evasion of income tax; well, I am an Income Tax Commissioner, and whether or not I have in my district very excellent surveyors and very honest people, I do not know, but the cases that come before me as an Income Tax Commissioner show that the surveyors, under the guidance of my right hon. Friend and my hon. Friend on the Treasury Bench, are very acute. They do not leave any stone unturned so far as I can see. Generally the cases that come before us are where the surveyors are putting on a higher rate of profit than actually has been made. I do not say we have never found a case the other way; but as a rule it is that the surveyors are only too anxious to obtain money for the State. I have a case of the kind in hand at the present time. Therefore I think the idea that there is all this evasion is away from the point; though, of course, there is evasion, and always will be, with heavy taxation.

Mr. RAFFAN: I desire to put two very short points. The Chancellor of the Exchequer pleaded that he should be given time for very full consideration and investigation before he brings in a measure to carry out the recommendations of the Royal Commission on Income Tax. In that I have no doubt he carries the assent of the whole Committee with him, but it has hitherto been understood that a measure of the character indicated would be brought in during the present Session, that is during the Autumn Session, that legislation would be enacted this year. I gathered from what he said in his speech this afternoon that he rather departed from the promise which he is considered to have given, and I should like, if possible, if he could conveniently do so, to say whether the Government adhere to the intention of dealing with this matter this year or whether it is now understood it may be necessary to take such time for consideration that it will be necessary to hold the matter over till next year. Information on this point will be acceptable to many, I believe, besides myself.
The other point I desire to raise is this. Various suggestions have been made to the right hon. Gentleman for the purpost of securing additional revenue. These he has promised to take into consideration. Some of these proposals, it has been suggested, are either unfair to the potential taxpayer, or would have no good results. I desire to make a suggestion which I should like the right hon. Gentleman to take into consideration. This suggestion, if adopted, would, in my view, bring him a very considerable amount of revenue. Certainly it would not be unfair to the taxpayer, and so far from having evil social results, the social results would be of the best character. The suggestion I make is to raise Schedule A and B of the Income Tax upon an annual basis instead of upon the capital basis. I do not propose to enter into the controversy which has just been debated as to the payment of Income Tax upon bonus shares. What ever may be the case of bonus shares, there can be no question of what happens in the case of people who are holding up land where the capital value has increased, and who are keeping it out of the market until it ripens, and they are able to acquire the highest price for it. There can be no doubt about it that the person who holds up year by year land in this way pays far less Income Tax than he would do upon the real annual value of the land; and at the end of the period he places it upon the market and is able to secure, very often, a huge sum for it upon which he pays no Income Tax whatever. That is altogether inequitable. I suggest that the right hon. Gentleman, therefore, might consider the propriety of raising the schedule in the way I have suggested. No one can suggest that it is in the public interest that land should be held out of use when there are willing purchasers who desire to have it for purposes of industry and other similar purposes. The result of such a substitution as I have proposed would be that probably the land would be put into the market earlier than otherwise, and there is no doubt the community would benefit, because there would be better scope for commercial enterprise. I trust the right hon. Gentleman will give this suggestion favourable consideration.

CLAUSE 14.—(Super-tax for 1920–21.)

(1) Super-tax shall be charged in respect of the income of any individual, the total of which from all sources exceeds £2,000, and Part II. of the Income Tax Act, 1918, shall have effect accordingly.

(2) The rates of Super-tax for the year 1920–21 shall, for the purposes of Section four of the Income Tax Act, 1918, as amended by this Act, be as follows:

In respect of the first £2,000 of the income—Nil.

In respect of the excess over two thousand pounds—

For every pound of the first five hundred pounds of the excess—One shilling and sixpence.

For every pound of the next five hundred pounds of the excess—Two shillings.

For every pound of the next one thousand pounds of the excess—Two shillings and sixpence.

For every pound of the next one thousand pounds of the excess—Three shillings.

For every pound of the next one thousand pounds of the excess—Three shillings and sixpence.

For every pound of the next one thousand pounds of the excess—Four shillings.

For every pound of the next one thousand pounds of the excess—Four shillings and sixpence.

For every pound of the next twelve thousand pounds of the excess—Five shillings.

For every pound of the next ten thousand pounds of the excess—Five shillings and sixpence.

For every pound of the remainder of the excess—Six shillings.

(3) All such enactments relating to Super-tax as were in force with respect to the Super-tax granted for the year 1919–20 shall have full force and effect with respect to the Super-tax granted under this Section.

(4) In estimating the total income of any individual for the purpose of Super-tax, the amount of any earned income shall be taken to be the full amount of that income without the deduction of any allowance under this Part of this Act, and Section 5 of the Income Tax Act, 1918, shall have effect accordingly.

The following Amendment stood on the Order Paper in the names of Mr. Charles Edwards, Mr. Bromfield, and Colonel Wedgwood: At the end of the Clause to add the words
In the case of the death of any married person liable to Super-tax at the rate applicable to the joint income of husband and wife during any year for which Super-tax is charged, a part only of the year's Super-tax shall be payable on the joint income of husband and wife proportionate
to the part of the year which has elapsed before the date of the death of such married person, and Super-tax shall be payable in addition on that part of the said joint income which is the income of the surviving spouse on the basis of the amount of the survivor's separate income assessable for Super-tax purposes for the year calculated at the rates applicable to such separate income, but in respect of such proportion only of the Super-tax which would be payable for the year as the period within the year of assessment subsequent to the death of the survivor's spouse shall bear to the whole year of assessment, and Section 6 of the Income Tax Act, 1918, shall have effect accordingly as from the fifth day of April, nineteen hundred and twenty.

The CHAIRMAN: The first Amendment standing on the Paper is out of Order. It introduces a charge, and would impose a tax on the widow to which she is not now liable.

Colonel WEDGWOOD: On a point of Order, I do not know what the Amendment actually does, but I know what it is intended to do, and what I believe it does, remove a tax. The point is this: As the matter stands at the present time the tax is payable on the joint assessment of husband and wife. In the event of the death of husband or wife, Income Tax is still payable for that year on the joint income even if the survivor has not the income. The point was brought out in Mr. Justice Rowlatt's summing-up in the case of Lady Mary Wyndham v. Rex. The judge pointed out that the effect of the legislation on the subject of the Super-tax was that if the wife, who had a separate income of only £100 a year, were to claim separate assessment in the case where her husband who had £20,000 had died, she would be liable to pay tax for the whole of the taxable year, even if her husband had died quite early in the year. The rate was applicable to the joint income of £20,100. She could obtain no relief in view of any loss of income she might sustain. Our point is, that this Amendment does away with that injustice. It proposes that in future, in dealing with the Super-tax, the husband and wife shall not be made chargeable for the joint income of the previous year in the year in which the tax is actually paid. I submit to you, Sir, that this is an obvious injustice, and ought to be remedied. In asking the Chancellor to accept this Amendment, we are asking a reduction of the tax and not an increase.

The CHAIRMAN: Unfortunately in the drafting of this Amendment the hon. and gallant Gentleman has not done what he intended to do. He has brought into assessment a widow for the remainder of the year in which her husband has died. That is the reason why it is out of Order.

Colonel WEDGWOOD: I put that proposal in to make it absolutely square. We want to put them both upon an equal footing.

The following Amendment stood on the Order Paper in the name of Mr. Lunn: At the end of Sub-section (4) to add the following new Sub-section:
(5) In estimating the total income of any individual for the purpose of Super-tax there shall be included therein in respect of any bonus shares to which such individual became entitled during the preceding year by reason of any holding of shares belonging to him,—
(a) if the bonus shares were issued free and no subscription was payable in respect thereof, the nominal value or such shares;
(b) if the bonus shares were issued in return for a payment by way of subscription, the amount, if any, by which the nominal value exceeded the amount payable by way of subscription in respect of such shares;
and in respect of any shares owned by such individual in a private limited company, a sum bearing the same proportion to the amounts placed to reserve as the individual's holding of shares bears to the issued capital of the company.

The CHAIRMAN: The Amendment standing in the name of the hon. Member for Rothwell (Mr. Lunn) also imposes a charge. It brings in persons not at present chargeable and in some cases would tax them twice over. Therefore it is not in order. These points can be raised in argument on the Clause.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir HENRY CRAIK: I want to draw attention to this Clause as it is now proposed. I cannot boast of that amount of financial knowledge which would enable me to enter into details, but I think one is entitled, if one is to apply such study as he can to the economic conditions of the country, to ask the Committee to weigh all that is contained in this charge. I speak with the disadvantage of not knowing, and not being acquainted with the various interests concerned, but with the advantage that I speak impartially. I have held no
land, and Super-tax leaves my withers un-wrung. I think it is necessary in considering a great question like this to remember the advance we have made upon what I consider a very dangerous and revolutionary sort of taxation. This is a question which has changed the whole aspect of taxation in this country. It is only 11 years ago since the first Super-tax was introduced, in the year 1909. Up to that time not a single financier of any reputation would ever have associated his name with any such proposal. No one would have opposed such a scheme of taxation more strenuously than Mr. Gladstone. I could quote for the benefit of my hon. and gallant Friend opposite (Colonel Wedgwood) another distinguished and very advanced Liberal, Mr. John Stuart Mill. His opinion with regard to a Super-tax was that it was, to say the least of it, a mild form of robbery.
A few years after these views were held by the most advanced Liberal Finance Ministers of the country we had this proposal made in the year 1909. I tabled a Motion against that Super-tax. It was discussed in the House, and I see no reason why I should not now make it perfectly clear what happened. There were many on the Conservative side of the House who had been severely struck by this Super-tax and they went into the Lobby against it. I was asked by my own Leader at that time not to go into the Lobby on account of the feeling of those of our own party who thought it was not right to vote against a tax which might affect their own pockets. I bore a certain amount of reverence for the delicacy which they showed, but I am not sure that I would have less reverence for them if they had said boldly, "Whether this is for our advantage or not, we consider it is not for the advantage of the country, and that caution ought to be taken in making this very dangerous descent."
It does not require a long memory to carry one back over those 11 years. The Super-tax amounted then to 6d., and I remember the Prime Minister waxing eloquent when I said that I sincerely believed that if a Super-tax was a proper system and ought to be used as a means of producing income that 6d. would never content me. I was laughed at, and the Chancellor of the Exchequer of that day retorted that he thought that to every Scotsman 6d. was a very serious consideration. That was hardly a remark
worthy of the Chancellor of the Exchequer in a serious discussion, but it had to do duty at that time, and we allowed the tax to pass unchallenged. What has happened? I prophesied that in a few years it would not be 6d., but that it would amount to a good deal more. What is it now? It is 6s., and therefore in nine years it has increased twelve-fold. My right hon. Friend the Chancellor of the Exchequer knows quite well that I am not finding fault with his Budget and that I am in no way blaming him. I quite conceive that, having come to the point he has now reached, it was impossible for him to go back, but I ask this Committee, considering all that is involved in taxation of this sort, to think gravely how far we have already gone, how rapidly we have moved, and think of all that is involved in taxation of this sort, which is what I call a very near approach to confiscation.
10 P.M.
Let us see exactly what this in fact means. Who are the people who are chiefly harmed by this tax? I would recall to the Committee an other incident of that year. I happened to be sitting next to a member of our own party—he is no longer in this House—one of the great leaders in the world of finance. I asked him what he thought of taxation of this sort, and he said: "I entirely disagree with it as a fiscal measure. I think it is a mistake; but if you ask me what effect it will have, I reply that I view it with the most absolute indifference. You do not suppose that finance all over the world—that the greater finance is regulated or kept down by mere municipal regulations which you make with regard to your taxation. We must balance our business, and spread it all over the world." I remember another Member of the House—at that time a Radical Member—who also has ceased to be a Member. He came to me, and said: "We disagree on almost every possible subject, but I agree with every word you said in your speech to-night with regard to the Super-tax. I know that that Super-tax will be our first, our strongest instrument in carrying out what we intend to do." These two opinions are not altogether uninstructive. We answered the call of the Chancellar of the Exchequer in 1909
for 6d. Super-tax. Eleven years later we are asked for a 6s. tax. How long will it stand there? It will go on on its Rake's Progress in interfering with the rights of property. Again, I ask, who are the people chiefly interested and wronged by this tax? Not the great financial interests, not the profiteers, not the great manufacturers, but the landed interest of this country. I know quite well that to hon. Members opposite any mention of the landed interest is like waving a red flag in front of a bull. I know my hon. and gallant Friend opposite (Colonel Wedgwood) can never see any political question, except through a glass which is coloured with the crimson beams of the landed interest. I never owned an acre of land. I am connected with no one who does own any; but I say if we look back at the history of this country, we find that the landed interest, and those responsible for it, have a right to claim that they have acted a great part in that history. It is not only unjust, but ungenerous and mean, for those who belong to a newer class to take up that cry. It is not my hon. Friends of the Labour party who have raised that cry; it is, as Lord Beaconsfield said, one of those commonplaces of middle-class ambition which humorously describes itself as democratic opinion. It is the middle class, the manufacturing class, who have led you into this unnatural, unreal, artificial dislike of the landed interest. Possibly you may doubt it, but I say that, looking through our history, one can see what has been done by the landed interest for this country, as by very few other classes of the country. They have sacrificed as much, and above all, more than with any other class, the property they own is considered to involve obligations and duties which they cannot get quit of, even if they would. Of course, there are unjust landlords; there have been men who, placed in that position, have used their power badly. But in what class are there not such men?

The CHAIRMAN: I am afraid the right hon. Baronet is getting too general in his remarks. This tax applies, not to one class, but to all persons whose income is over a certain amount.

Sir H. CRAIK: I know that, but this class is the one which is taxed through Super-tax upon an income which is often
purely imaginary, and not really at the disposal of those who receive it. There is no class which suffers by this Super-tax to anything like the same extent as the landed class. The landed class, we know, is credited with an income which is purely artificial, and which is estimated on a misleading basis, and it is upon that that they are charged Super-tax. This great landed class, who, despite the jeers of my hon. Friends opposite, have played a great part in our history, are rapidly coming to the end of their work. On every side it is becoming impossible for them any longer to hold their place. Land will be held, but not by those who held it as involving a certain duty, and as making themselves the friends of those around them. It will be held, necessarily, by those whose interests are far elsewhere than in the land, by those who have financial interests which will weigh with them more strongly than the land, by those who will either neglect their land or will, on the other hand, apply their business methods to it, and seek wholly and solely to extract the very largest profit from it that they can. That will be the result, that is already the result of what you have done in this Super-tax. You have taxed this class, be it great or small—that must be admitted—almost out of existence. You only have to look at the columns of the newspapers to see how few of the landowners can any longer afford to keep the land, with the burdens, the duties, the obligations always connected with it. Now that we have gone so far, we cannot cut this tax out of our Budget this time, and I know my right hon. Friend, however much sympathy he may have with this heavily burdened class, is bound to continue it, but it behoves this Committee carefully to take stock of the length to which they have gone and of the dangers involved in it. The Committee has perhaps shut its ears and blinded its eyes to the real facts of the case, because those injured by this tax have not themselves uttered their plaints, and have not made their remonstrances vocal. They have avoided doing so because they felt that heavy taxation was now necessary in the condition of the country. All honour to them for doing so. They have avoided it, and let us remember that from the first time this House introduced it in 1909 till eleven years after it has scarcely ever been
the subject of half-an-hour's discussion, and on no occasion have these remonstrances or the objections to the tax been raised by any of that class to which I have referred. That class is one which may go down, but it will be regretted by the country, and it will leave behind it, I believe, whatever its fate may be, a memory of great public duties well performed. I would ask hon. Members to compare the happiness of the rural population in past generations under the guidance and with the friendship of this landed class who are now being taxed out of existence with the conditions of the manufacturing classes in our great towns.

Mr. W. GRAHAM: I should like to make a brief but probably not inadequate reply to the speech of the right hon. Gentleman (Sir H. Craik), one of whose constituents I happen to be. I am sure I express the feeling of the majority of Scottish Members when I say that we are surprised to find such doctrines coming from a representative of a Scottish constituency, because we have always believed in advanced taxation and we have always subscribed very strongly indeed to the principle of imposing the taxes on the shoulders of those best able to carry them. At this time, in spite of the dark and almost terrible picture which the right hon. Gentleman has drawn, what are the actual facts of this situation? When the Super-tax was imposed in 1909–10 the actual number of people involved was 11,000. In 1918–19 the number involved was 48,000. If we pass this Budget and reduce the Super-tax limit to £2,000 we stand to add an extra 30,000 to that total; so that in round figures we cover not more than 80,000 people. No hon. Member will contend that a tax which falls on 80,000 out of 44,000,000 people can be said to be a tax which affects a tremendous portion of our industry and our commerce, or a large proportion of our life and activity. The broad facts of this tax do not substantiate the terrible picture which the right hon. Gentleman has painted for the benefit of this House. I want to make it perfectly clear from the point of view of the Labour Members that we fully appreciate the burdens which different sections of the community are carrying. We yield to none in our admiration of the personal sacrifice which has been made by the landed classes and others during
the past five years. We have always recognised that landowners, land labourers and others have gone down together in one common cause. Let there be no doubt or hesitation on that point. I am also willing to admit, as one who has seen the incidence of this taxation under the investigations we made in the Royal Commission, that landowners are in a peculiar and in some respects a difficult position, though I am not willing to admit that they are not able to carry most of the taxation imposed upon them at the present time. That is not the point at issue in this Debate. If we analyse the Super-tax we shall find that included in the 80,000 people there is a conspicuous and strong element which year after year is drawing its income in this country, not so much by its own personal exertions, not so much from the toil in which it engages, but more or less by automatic processes as a result of great monopolies, trusts and combines which give that income without any effort or any exertion on the part of the recipient. Is it unfair, in the light of the present direct taxation and more especially in the light of the indirect taxation and the terrible burden which it involves upon the very poor, to say that people with £2,000 a year and upwards should be called upon to pay a little extra by way of Super-tax, and that we should ask them to make that sacrifice probably by the process of reducing luxury expenditure—there is nothing we require to do more than to reduce luxury expenditure—and so ease the financial situation of the country in a manner which imposes no injustice upon them, but which involves real benefit for the rest of the people.

Colonel WEDGWOOD: Cato weeping for the lost virtues of the Roman republic was nothing to the right hon. Gentleman (Sir H. Craik) weeping for the landed aristocracy of this country. I think he might spare his tears on this occasion. Surely in this Budget in which we are abolishing all trace of taxation on land values or any form of burden upon the landed interest, and when they are getting back all the arrears, this is not the occasion for those bitter tears. It is not merely the landed aristocracy of this country who are paying super-tax. I do not like supertax a bit. I differ from most of my colleagues on these Benches in this matter. I have
the strongest objection to supertax, and for very good reasons. My objections to supertax are that I object to putting the heaviest burden on the broadest back. I believe it is a universal claim in this House that you ought to put the heaviest burden on the broadest back, and that when you have done that you have done all that can be done in the way of taxation that is equitable, just, fair and proper. Well, Mr. Whitley, you and I know that that is not so. We know that taxation should not be according to ability to pay, but that it should be according to benefits received and that in that case you would have just taxation instead of merely equitable taxation. And one of my reasons, my only reason I suppose, for objecting to supertax or Income Tax, is that those are taxes which have no relation to justice, and that only by taxing lane values can you tax according to benefits received.
But the hon. Gentleman opposite in bewailing the results of the supertax forgot one very important point. The supertax is a tax which is hated and justly hated by all old men. It is very popular with the younger generation. The parent getting on in years who sees himself rendered liable to super-tax immediately thinks that his children require an independent income and they get it before they otherwise would. I have not done so badly myself. To evade Income Tax, and perfectly justly, by dividing your property among your children may be unpopular with the parents but it is extremely popular with the children. I cannot help thinking that one of the principal results of imposing supertax has been the breaking up not only of big estates, but also of the big properties in shares and capital among the children of the people who are enjoying those incomes. Not a bad result on the whole if you are going to consider the benefit of the greatest number instead of my canon measuring taxation by justice. The super-tax has come to stay. I quite agree that the supertax may be abused, and that in the supertax you are getting day by day and year by year more and more gross evasions. After all, dividing property among the children is not so much an evasion, but there are many less reputable ways of evading the Income Tax than that.
I think it is actually a Member of this House who has invented perhaps the most
skilful way of evading Income Tax that is known. [HON. MEMBERS: "Name!'] He is not here. I would not give his name. I would not give him away for worlds. [HON. MEMBERS: "The scheme!"] I will give you the scheme. It is this: You form yourself into a company. All your property becomes the property of that company, and the dividends of all those companies in which you originally had holdings are paid into this holding company. This holding company is you, but it has this advantage that if this company pays no dividend to you, although you are the sole shareholder, you are not liable to Super-tax. It is true that Income Tax is paid. All the shares which are paid into that company of course pay Income Tax, but that company holds the dividends and does not pay any dividends out to you. The reserves accumulate; the property in the holding company becomes daily more valuable, and, when you want money, you borrow it from the company at a reasonable rate of interest. The company makes loans to you. In that way you avoid altogether the payment of Super-tax. I presume that at present that method is perfectly legal.
There are, of course, endless ways in which you can manage to dodge this tax. The way mentioned earlier in this Debate is very common. The issue of bonus shares by the companies is the best way of preventing shareholders having to pay Super-tax. You pay a regular 10 per cent. dividend and if you happen to have shares in certain companies you get every year a bonus share as well. You may have to pay 20s. for a share worth 40s., but the other 20s. is a little addition to your income or your capital. In any case that addition to your income does not have to pay Super-tax. You may pay Super-tax on the 10 per cent. dividend on the shares in that excellent coal company, but you do not pay Super-tax on the bonus share that you get, which adds to your wealth. This system of bonus shares is growing daily, because most of our company directors happen to be in the position of Super-tax payers, and, therefore, the natural tendency is to pay dividends not in the way of ordinary dividends but in the way of bonus shares, or shares issued at a discount. I submit that if this Super-tax has come to stay the sooner these evasions are done away with the better,
because it is not merely the loss to the revenue that matters; it is the creating of dishonesty and a sense of injustice throughout the body of taxpayers. It is said, "If one man does it why not I?" Therefore, the system of attempting to evade taxation spreads. I beg the right hon. Gentleman as soon as possible to introduce legislation which shall make the Super-tax water-tight, and perhaps when he makes it water-tight he can reduce it at the same time, so that he brings in the same amount of money but brings it in from everyone instead of from those unfortunate ones who do not know how to evade the tax. I beg the hon. and learned Gentleman opposite not to waste too much time upon Gladstone and John Stuart Mill. After all, when we are recommending the views of Gladstone and Mill to this House we might also recommend their views on economy, on public expenditure, on war, and on foreign policy, and not merely their views on taxation. I wonder what Gladstone or Mill would have said if either of them had been Chancellor of the Exchequer at the present time. It is all very well to talk about the views of these pundits when taxation was 70 millions, 60 millions and even only 50 millions a year. You can have fine, sound and thorough views on finance with such taxation, but when you have to raise £1,400,000,000 even Mr. Gladstone might be unsound for a moment and might consider the possibility of getting money even by a Super-tax. I feel certain that if we could only persuade the Chancellor of the Exchequer to model himself more upon Gladstone and Mill, not only in the raising of the money but in preventing other people spending the money, we should not have Budgets like this.

Lieut.-Commander KENWORTHY: I do not propose to deal with the terrible misfortunes of the landed class or the evasions practised by the plutocracy in order to escape taxation. I have a certain sneaking sympathy with the hon. Member for the Scottish Universities in drawing attention to this Super-tax. I think it is only right and proper that there should have been some little Debate on such a very crushing burden of taxation. When we come up to 12s. in the pound for Income Tax it is a matter for very grave consideration indeed. I do not want to make any proposal to abolish
it or cut it down, and I would not be in order in moving any increase. I do think that the top level should be raised. There is a very good graduation on the revised rates up to that level, but not in the case of enormous incomes. In view of the terrible needs of the Exchequer, I think there should be a steeper graduation on those enormous incomes. That would bring home to the rich of the country what I wish to point out. This Super-tax is very hard in its incidence in certain cases, and leads to dishonesty and evasion. It hits the people who are, I believe, above all others responsible for the present financial state of the country. The people who pay Super-tax have been resisting the economies which we on these Benches have been trying to preach. The right hon. Baronet the Member for the City (Sir F. Banbury) has always resisted when we tried to effect real economies, and has always stood by the policy of enormous armed forces.

The CHAIRMAN: That is quite outside the question.

Lieut. - Commander KENWORTHY: This tax is sometimes very severe, but nevertheless I hope it will bring home to the people what Imperialism costs and adventure abroad.

The CHAIRMAN: I do not know how many times I have told the hon. Member that he drags in questions which do not arise and he really must not pursue the subject.

Lieut.-Commander KENWORTHY: I do not see how this Super-tax can in any way be reduced unless in the future various methods which have been pointed out for reducing debt are adopted.

Sir F. BANBURY: In my opinion the Super-tax should be abolished and if a tax is to take its place it should be in the form of Income Tax. What is the result of having Super-tax and Income Tax? The ordinary person, and this is very important in view of the enormous power now in the hands of the people, thinks that the Income Tax in its heaviest scale is 6s. in the £. As a matter of fact, the Income Tax and Super-tax which are really one tax, amount in some cases to 12s. in the £ and in many cases to 10s. in the £. That is not known. A large number of the working classes are under
the impression that this is a rich man's. Budget and that the poor man is heavily burdened. Nothing could be further from the truth. This is really a Budget which imposes a great burden upon the rich men and the Super-tax is the chief reason why this great burden is imposed. I should like to congratulate my right. hon. Friend (Sir H. Craik) upon his extremely interesting and able speech, but I am not going into the question as to what the landed class have done for the country. It would be a little out of Order, and it is perfectly well known. The fact, however, remains that by imposing the tax in this way, you are creating a false impression as to the burden which people have to bear. This is not the first time that I have raised this question, and I intend to go on raising it until I get it altered. I cannot for the life of me see why the Chancellor of the Exchequer will not accept my suggestion and, instead of imposing 12s. Income Tax, made up of 6s. Income Tax and 6s. Super-tax, impose 12s. Income Tax on certain incomes. It would save an immense amount of trouble. I am one of those unfortunate people who pay Super-tax, and I happen also to be a landowner. Last year I paid Super-tax on £1,100 which I never received. The Income Tax Commissioners recognised it, but said, "Well, under certain circumstances"—which will never arise—" you may get it back." I do not think some hon. Members really understand the difficulties in which people who have to pay Super-tax are placed, especially if you have the misfortune to own land. You are assessed on your nominal income, whereas, as a matter of fact, you do not get more than about 60 per cent. of it.

Mr. PRETYMAN: More like 6 per cent.

Sir F. BANBURY: A very large proportion of it you never receive at all. It would be so much simpler to be assessed at the source in just the same way as you are assessed for Income Tax. The hon. Member for Central Edinburgh (Mr. W. Graham) apparently thinks that this a good tax because it affects only 80,000 people out of 44,000,000.

Mr. W. GRAHAM: I quite agree that a tax may be very unjust even although it falls on a comparatively few people. I said that it was not true to suggest that it covered a large section of
the population, and I showed that only 80,000 people were involved.

Sir F. BANBURY: That is why I think it is such a dangerous tax. It is a very big tax when you remember that it is in addition to an Income Tax of 6s. If it affects only 80,000 out of 44,000,000, and if the majority of those 44,000,000 have the vote, then, human nature being what it is, is it not a very great temptation to those people to say, "We will abolish the Tea Duty, the Tobacco Duty, or the Beer Duty, which fall upon the majority of the population, and we will make it up by putting it on the 80,000 people who, after all, cannot protect themselves, and therefore do not count." That is a serious state of things, and it is one of the great dangers of democracy, and therefore I think the Super-tax ought to be embodied in the Income Tax, and when expenditure is reduced the first thing that ought to be reduced is this enormous Income Tax and Super-tax.

Mr. CHAMBERLAIN: I am not rising in order to prolong the discussion, for I think the Committee will agree that the Debate, although no doubt interesting, has been still more discursive. Indeed, if, on every occasion on which such a thing were possible, we were to undertake such a rambling discussion as that we have just listened to, I should despair of making any progress at all. I rise to answer a specific question which was put by my right hon. Friend the Member for the City of London (Sir F. Banbury) as to why I did not adopt a suggestion which he has made, and in which he seemed almost to think he had a patent right, although he was willing that I should work his patent right, a suggestion for simply amalgamating Super Tax and Income Tax. Has my right hon. Friend read this invaluable work, the Report of the Royal Commission on Income Tax? May I refer him to paragraph 573, which says:
Some witneses have proposed that the Income Tax and the Super-tax should be merged and assessed together. If taxation at the source were abolished, and if Income Tax were invariably chargeable by direct assessment on the income of the year of assessment, it would, of course, be possible to charge the taxpayer in one sum at the effective rate appropriate to his total income. So long as taxation at the source is maintained at a standard rate—less than the highest effective rate—there is no possibility of emerging the ordinary Income Tax with
the Super-tax. Take the case of a man who has £40,000 a year for taxed sources and no other income. Unless tax is to be deducted at the source at 10s. in the £, which is an impossible supposition, that taxpayer must continue to bear Income Tax by deduction at the standard rate and pay his Super-tax separately by way of a direct assessment. The suggestion that the two taxes should be completely merged and dealt with as one is plausible, and conceivably desirable in the abstract, but we are satisfied that there must needs be a separate assessment unless the foundation of the Income Tax are modified in a far more radical manner than we are prepared to recommend.
It is not pure obstinacy which prevents me from adopting my right hon. Friend's suggestion, but it is because in the first place I am now fortified by the Report of the Royal Commission, and I am convinced that it is impracticable. May I now make an appeal to the Committee? There has been no obstruction. I do not suggest it for a moment, but there has been very full discussion, and we have made very slow progress, and I beg the Committee to help us to get on.

Sir OWEN PHILIPPS: I wish to support the right hon. Member for the City of London (Sir F. Banbury), in the appeal he has made to the Chancellor. I have read the Report of the Income Tax Commission, and I do not think it in any way prevents the Chancellor accepting that proposal. I would appeal to him to give this matter further consideration before next year. The matter can be met in this way, that all that I think is necessary is that the whole 12s. should be known as Income Tax, but that only 6s. should be deducted at the source. I think that will get over the difficulty of the Chancellor, and the moment the House of Commons decides to call the whole of the 12s. Income Tax, we shall be prevented from hearing the sort of speeches that came from the Labour Benches this afternoon, saying that the rich man did not pay a fair share of the taxation of this country. I would therefore urge the right hon. Gentleman to give this question his consideration.

CLAUSE 15.—(Allowance in Respect of Earned Income.)

For the purpose of ascertaining the amount of the assessable income of an individual for the purpose of Income Tax, there shall be allowed in the case of earned income a deduction from the amount of that income as estimated in accordance with the pro-
visions of the Income Tax Acts of a sum equal, to one-tenth of the amount of that income, but not exceeding in the case of any individual two hundred pounds.

The following Amendment stood on the Order Paper in the name of Colonel Newman: After the word "earned," to insert the words "as distinct from invested."

The CHAIRMAN: This Amendment should come on Clause 30.
Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir F. BANBURY: I think this is a most important Clause. About a fortnight or three weeks ago I asked my right hon. Friend if he could give me the number of taxpayers in the preceding year, 1919, and what the number would be if his proposals were carried into effect. This is what he said:
The number of individuals liable to Income Tax for the year 1919–20 is estimated at 3,700,000. The number of individuals that will pay tax for the year under the present Budget proposals is estimated at 2,450,000.
Under this Clause and the next Clause we are going to reduce the number of Income Tax payers from 3,700,000 to 2,450,000. It is going to be brought about by exempting a large portion of the working classes from paying Income Tax. That is the rich man's Budget, about which an hon. Member earlier in the evening talked! We are going to make what is, in my opinion, a most fatal error. We are going still further to reduce the number of people who pay Income Tax and Super-tax, and we are going to increase the Super-tax and put that burden upon a smaller number of people than bore it last year. I do not care what the Income Tax Commission recommended. A Royal Commission is not always infallible, and I think the very first thing we ought to do, in view of the enormous expenditure and the enormous taxation which this country has to bear, is to endeavour to equalise it over all the voters. The old Liberal principle was that taxation and representation should go together. At the present moment representation goes, and taxation does not go. The representation enjoys subsidies from the State in the shape of free education, subsidy for bread, subsidy for health, subsidy for housing, and the payment is made, not by the people who are enjoying the subsidy, but by a small
class, not exceeding at the present moment 2,450,000 out of a total population of 44,000,000, or whatever the number may be. What the Chancellor of the Exchequer ought to have done was to have continued the alteration which was made, so far as I remember, some four or five years ago, when the limit of exemption, which originally stood at £160, was reduced to £130. To my astonishment the Chancellor of the Exchequer has gone right away from the principle, has reversed it, and has exempted a large number of people who are in receipt of much higher incomes, who have double or treble the wages they had before the War, while people who pay Super-tax in many cases have no larger incomes, while half of it is taken away from them. They are, therefore, far and away poorer than before the War. They, too, have the increased cost of living to contend against. Then there are various exemptions even to the present payment. It all tends in the wrong direction. It may be right that we should have extended the franchise in the way we have. Grant, for the sake of argument, it was right. But the privilege of voting and the privilege of imposing burdens necessitates that the persons who impose them should also bear them. That is what this Amendment prevents. What the Chancellor of the Exchequer ought to have done was to reduce the limit of exemption. Instead of making it £130 it should have been £100. It is quite possible what I have said may not be popular in the country. But it is not always things that are popular that are right. If hon. Members will study history, they will find that the economists said that the time would come when the many would impose taxation upon the few. That is, unfortunately, where we are getting to at the present time.

Mr. CHAMBERLAIN: May I point out to the Committee that the question of the various allowances can be more conveniently raised on Clause 17 and the immediately following Clauses? The effect of the whole of the Clauses put together is to follow the recommendations of the Royal Commission. I would make a very earnest appeal to the House that they should take the present Clause and Clause 16 before we adjourn. The only Amendment of substance that is down on Clause 16 is that relating to contributions to hospitals,
which, I understand, you, Mr. Whitley, think should come up as a new Clause. Then we shall get the question of these allowances first thing to-morrow on Clause 17.

Mr. BILLING: I am surprised that so able a politician and a financier as the right hon. Gentleman the Member for the City of London (Sir F. Banbury) should have missed the substance of this proposal. Surely the right hon. Gentleman realises the reason for this proposition. The present Government is dependent upon the democratic vote and realises that once the democratic voters are called upon to contribute to the Government's extravagance, once it is brought home to the working man what the present administration is costing, and how he has to contribute to it out of his wages, they would collapse at the next General Election. The whole trouble is that the working man does pay the tax, but he does not realise it. I want to see a Budget introduced which will bring home to the humblest worker what the present administration is costing. Once the democracy realises what this bureaucratic machine is costing, that will be the end of bureaucracy.

CLAUSE 16.—(Deductions to be allowed in ascertaining taxable income.)

(1) An individual who, in the manner prescribed by the Income Tax Acts, makes a claim in that behalf and who makes a return in the prescribed form of his total income shall be entitled for the purpose of ascertaining the amount of the income on which he is to be charged to Income Tax (in this Act referred to as "the taxable income") to have such deductions as are specified in the five Sections of this Act next following made from his assessable income.

(2) The provisions of Sections 27, 28, 29 and 30 of the Income Tax Act, 1918, and of paragraph XVII of the Fifth Schedule to that Act, shall apply for the purpose of claims for any such deductions as aforesaid as if those provisions were re-enacted in this Act and in terms made applicable to such claims.

The following Amendment stood on the Order Paper in the name of Mr. Lyle: At the end of Sub-section (2) to insert a new Sub-section—
(3) Contributions, donations, or gifts to hospitals, philanthropic institutions, or scientific research carried on exclusively in the public interest, shall be exempted from all sums liable to Income Tax.

The CHAIRMAN: This proposal should come up in the form of a new Clause.

Clause ordered to stand part of the Bill.

CLAUSE 17.—(Personal allowance.)

Motion made, and Question "That the Chairman do report Progress, and ask leave to sit again" put, and agreed to.—[Mr. Chamberlain.]

Committee report Progress; to sit again to-morrow.

Orders of the Day — MINISTRY OF MINES [SALARIES AND EXPENSES].

Resolution reported,
That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of an annual salary not exceeding £2,000 to the Minister of Mines, and of such other salaries, remuneration, and expenses of the Ministry as may become payable under any Act of the present Session for establishing a Ministry of Mines, and for regulating the coal industry and for other purposes connected with the mining industry and the persons employed therein, and of any sums that may become payable by the Treasury by way of temporary advances by reason of the extension by such Act of the continuance of the Coal Mines (Emergency) Act, 1920.
Provided that the total amount so paid shall not in any one year exceed the sum of two hundred and fifty thousand pounds.
Provided that fees or expenses of any pit or district committee or area or national board or any members thereof which may be constituted under the said Act will not be payable as expenses of the said Ministry.

Resolution read a Second time.

Mr. G. LOCKER-LAMPSON: I beg to move, after the word "paid" ["Provided that the total amount so paid"], to insert the words
in respect of the salaries, remuneration and expenses of the Ministry, and for regulating the coal industry, and for other purposes connected with the mining industry and the persons employed therein.
It will be in the recollection of the House that last night an Amendment was accepted limiting the expenditure of the Ministry to a sum of £250,000. Since then it has been pointed out to me that the Amendment did not properly come in in the place in which it was put, and that the Resolution, as eventually passed, covers too wide a ground, because if it remains as it is on the Paper at the pre-
sent moment, it means that £250,000 is the only sum which can possibly be paid by the Treasury with regard to the whole transactions of the Ministry. But other lines in the Resolution refer to certain sums which have to be issued by the Treasury from time to time in order to cover losses made by certain mines in the country. I understand that losses made by certain mines are made up out of the profits earned by other mines. The profits are in fact pooled, and the Treasury from time to time has to issue large sums to make up losses in certain mines, and eventually these sums are reimbursed to the Treasury out of the profits of other mines. Therefore the Resolution, as it stands now, will prevent the issue of sums by the Treasury for that particular purpose. I do not want the £250,000 which was passed last night to apply to that part of the Money Resolution. If the Amendment which I have now moved is passed, it will still enable the Treasury to issue sums for the purpose to which I have referred.

Colonel WEDGWOOD: I beg to second the Amendment.

The PRESIDENT of the BOARD of TRADE (Sir R. Horne): I am much obliged to my hon. Friend for taking notice of the embarrassing position caused by the terms of the Amendment which he moved last night. If the Amendment had been on the Paper, one would have had an opportunity of seeing exactly how it fitted in with the general Resolution. I accepted it in the spirit in which it was moved, namely, that the £250,000 was to cover the expenses of the Coal Control and the administration of the Mines Department. My hon. Friend has recognised the difficulties in which we should have been placed owing to the fact that, as he has explained, the last three lines of the Resolution apply to matters which could not be covered by the £250,000, but which are met by the incomings to the Coal Controller to recoup the outgoings which the Treasury has advanced in order to meet the obligations which my hon. Friend has described. Accordingly, I accept his Amendment so far as it goes, but I do not think he has covered quite enough. He provides that the £50,000 shall cover the salaries, remuneration and expenses of the
Ministry and the regulation of the coal industry, and so far I agree with him; but he goes on, "and for other purposes connected with the mining industry and the persons employed therein." I venture to put it to the House that these last words also will have to be omitted, because they apply to particular obligations under which the Coal Control is to meet advances in wages which were granted to the miners of this country by certain increases last year and this year. These advances were granted by the Coal Controller on behalf of the Government. As the Coal Controller is responsible for paying these advances in wages, it is obvious that the £250,000 could never cover them, and they must now be paid out of the funds which come into the Coal Controller's hands. It would be a great mistake, and would create endless confusion in the coalfields, if it were sought to make the £250,000 cover these things also, and accordingly I hope my hon. Friend will agree to stop at the words "coal industry", making the proviso as to the £250,000 covering expenses include, not merely the salaries, remuneration, and expense of the Ministry as they become payable, but also the cost of regulating the coal industry, but excluding, on the other hand, what must be paid in wages by the Coal Control to those who are employed in the coal industry, and also the sums, for which the Treasury is responsible, for making up deficits temporarily upon coal mines which do not pay. Accordingly I hope my hon. Friend will accept what I suggest and will put it in his Amendment.

Captain ELLIOT: I wish to ask your guidance, Mr. Speaker, to whether it would be subsequently in order to move in Committee a Clause placing a levy of some small sum, say, ld. per 100 or 1,000 tons on coal got in this country, for the purpose of carrying out research in connection with the utilisation of this and other sources of fuel, or if it would be competent for me later to move a new Clause suggesting that a levy should be made on the coal for the purpose of carrying out research in connection with fuel, or whether it would require to come within the £250,000 at pesent moved. I should be glad if you would give a ruling.

Mr. SPEAKER: I should be glad to do so, but it really does not rest with me. The Amendment which the hon. Gentleman will propose would be in Committee
on the Bill, and it would be a matter for the Chairman to decide. I have already ruled that it would be open to hon. Members to move, in the course of the passage of the Bill, to insert proposals for raising a levy, because a levy is imposed only on a limited number of persons, and would not be a charge on the public, and therefore there would be no necessity for the King's consent to be signified. It might be moved by the hon. Member or accepted to meet the view of the hon. Member.

Captain ELLIOT: In that case there is no necessity to raise it at the present stage of the proceedings. It is far more important possibly than any other thing that is going to be discussed under the Bill that research should be carried out both in the utilisation of our present fuel supply and the discovery of new sources of energy when those are exhausted, and if it is possible to raise this in Committee I do not wish to raise it now, but I wish, if possible, to have a lead from the Chair as to whether we shall be in order subsequently in discussing this vitally important point, because I consider that research is far and away the most important thing that will arise under all the provisions of this Bill.

Mr. SPEAKER: This Resolution only relates to charges which will become payable by the Exchequer. Other charges may be added to the levy which may become payable by persons other than the Exchequer.

Captain ELLIOT: The Clause says "the Minister of Mines shall undertake the initiation and direction of research," and therefore I thought it might be in order to raise this question of research on this sum of £250,000 which is to be granted for the purpose of the expenses of the Ministry of Mines, since this is the only sum which will be available to him to pay out salaries for those engaged in actually prosecuting the research which it is part of his duty to initiate and coordinate. That is the point I wish to be quite clear upon.

Mr. SPEAKER: I am afraid I cannot assist the hon. and gallant Gentleman any further. It is not a matter that rests with me. It will rest with the Chairman of the Committee.

Sir R. COOPER: The President of the Board of Trade spoke of the Coal Con-
troller paying the miners' wages. Is that really a correct statement? I understand all the Coal Controller does is to make up the standard profits in the case of those companies which are making a profit below the pre-War standard, and only in that sense can they be said to be paying the wages.

Mr. RENWICK: Am I correct in interpreting what has been said by the President of the Board of Trade, that this £250,000 will be largely used in connection with the raising of the wages of the miners? [HON. MEMBERS: "No."] At any rate, it is for the payments in connection with the machinery for raising the wages. If so, we clearly see that there will be another rise of wages, and the £250,000 will have to be increased. The £250,000 will be a very small amount in a very short time, because we are told that this money is required for regulating the coal industry, and for purposes connected with the mining industry and the persons employed therein. Before we are asked to vote this money, we ought to be told for what purpose it is required, in addition to the £2,000 for the Minister. I represent a very large mining centre, and we are very much interested in the matter. We want to get rid of all control, if possible, but I admit we cannot do that at present. I hope this money will not be granted offhand, otherwise we may have another big bureaucracy like the Ministry of Transport before we know where we are.

Mr. HOLMES: Shall I be in order now in moving to reduce this sum by £75,000.

Mr. SPEAKER: We must first get rid of the other Amendment.

Mr. HOLMES: Then I will speak now. The memorandum which the President of the Board of Trade circulated in regard to the expense likely to be incurred upon the Ministry of Mines reads as follows:
Beyond the salary of £2,000 made payable by the Bill to the Minister of Mines, the establishment of the new ministry is not likely to involve any substantial increase in expenditure, inasmuch as the majority of the powers of the new Ministry will be derived from the transfer of existing powers from other Government departments, the concentration of which in a single department is one of the chief objects of the Bill.
That is intended to convey to the House the idea that merely certain officials would be transferred to the Ministry of Mines,
that their salaries would not be increased, and that the only additional expenditure which the Exchequer will have to meet in this Bill will be the £2,000 for the salary of the Minister. I would ask the House to realise what departments are to be transferred to the Ministry of Mines. In the first place there is the Coal Controller's Department. Then there are certain sub-departments of the Home Office, one of which deals with the inspection and safety of mines and another with mining examinations. There will be a sub-department of the Board of Education which deals with the geological survey. There will be a sub-department of the Woods and Forests Department, which deals with the lands of the Crown which have coal under them. One or two minor departments will have to be transferred, but they are not worth referring to. It will naturally be assumed on reading this White Paper that all these departments at the present time have been a charge on the Exchequer. Take first, the Coal Controller's department. I said last night that the Coal Control Department has never been a charge upon the Exchequer. The Coal Control Department has always been paid for by the coal industry. Section 7, Sub-section 3, of the Coal Mines (Emergency) Act, 1920, says:
There should also be debited to the said Fund such amounts as may be necessary to meet the administrative expenses of the Board of Trade constituted for the purpose of that control of the coal industry incurred during the period of the operation of this Act.
That shows that the Coal Control Department up to the present has been paid for out of profits of the coal industry, and could not have been charged upon the Exchequer. Therefore, if that Department is going to be transferred, there is going to be a new charge on the Exchequer beyond the £2,000 salary of the Minister of Mines. The President of the Board of Trade told me last night that I was grossly inaccurate. The explanation he gave was that the surplus out of the pool of the profits of the coal industry would go to the Exchequer. The House will be aware that the first Act dealing with the Coal Control was the Coal Control Agreement Act of 1918. That confirmed an agreement made with certain coalowners by the Coal Control in 1917. The provisions were that
the coalowners should not merely pay to the Exchequer the 80 per cent. Excess Profits Duty, but should pay beyond that 15 per cent. into a pool, so only holding 5 per cent. beyond their pre-War standards, and that that pool should be used for the purpose of paying other coalowners who did not make the pre-War standard such sum as would make up to them the pre-War standard, that pool was continued in a different way under the Coal Mines. Emergency Act. The argument of the President of the Board of Trade last night was that if there was any surplus under this Bill when the Coal Control came to an end, that surplus would go to the Exchequer, and he therefore argued that since the expense of the Coal Control Department came out of the pool, if it had not come out of the pool, the amount received by the Exchequer would have been so much more, and therefore in effect the argument was that the Exchequer was paying the expenses of the Coal Control Department. I ventured to say that the Exchequer had no right whatever to touch that pool, and nothing but an Act of Parliament could enable it to do so. He greeted that remark of mine by the monosyllable "nonsense"—[HON. MEMBERS: "Two syllables"]£with the single word "nonsense." I am going to try to show that it is not nonsense. He has no right whatever, nor has the Chancellor of the Exchequer, nor anyone else, to touch a penny of any surplus that may remain in the pool when the Coal Control comes to an end. When the Coal Mines Agreement Bill came before the House for Second Reading in November, 1917—

Mr. SPEAKER: I do not quite see the relevance of this to the Amendment now before the House.

Mr. HOLMES: The financial resolution which we are discussing is supported by the Memorandum as to expenses likely to be incurred which has been circulated by the Minister. Surely we are entitled to say that the Memorandum is misleading?

Mr. SPEAKER: We are discussing an Amendment which has been proposed, and the Debate must be confined to that Amendment. When we have disposed of that, I am prepared to take the hon. Member's Amendment, as I have already stated.

Mr. LOCKER-LAMPSON: I am willing to accept the suggestion of the President
of the Board and his assurance. I wish, therefore, to alter the wording of the Amendment, so that it would stop at the insertion, after the word "paid," of the words "in respect of the salaries, remuneration and expenses of the Ministry, and for regulating the coal industry."

Captain W. BENN: I understand we are at present amending, at the suggestion of the President of the Board of Trade, a Resolution which was amended at the instance of the hon. Member for Wood Green (Mr. Locker-Lampson). On that I want to point out that the President of the Board of Trade asks for a restriction to be put into the Amendment so that it shall not be understood to interfere with his power of spending money, outside the £250,000, "for other purposes." That is the point of the Amendment. I want to direct the attention of the House to the last paragraph in this Memorandum, which states that
With respect to the extension of the continuance of the Coal Mines (Emergency) Act, 1920, it is not anticipated that the extension will involve the necessity for any additional advances from the Treasury to the account established under that Act.
What is the meaning of that. Either the Memorandum is to be relied on or it is not. If it can be relied on, the Amendment is otiose; if it cannot be relied on, it shows how much importance is to be attached to such documents.

Amendment made to proposed Amendment: Leave out the words "and for other purposes connected with the mining industry and the persons employed therein."—[Mr. G. Locker-Lampson.]

Question proposed, "That the proposed words, as amended, be there inserted in the said Resolution."

Lieut.-Commander KENWORTHY: We are discussing, I understand, the uses to which the £250,000 is to be put, and I wish to ask the President of the Board of Trade a question, because it seems to me that the £250,000, even for the limited expenditure that we have agreed to, has already practically been exceeded, and the fears of the hon. Member for Newcastle Central (Mr. Renwick) have been realised. I have here the estimates of the Coal Department of the Board of Trade, and there is there a total sum this year of £550,521. That is the net amount. The gross amount is £605,601, but there is a note stating that the estimated re-
duction of staff will lead to a saving of £55,080. I take it that the principal justification of the hope of saving is the fact that the biggest item of all is to drop, and that is contributions towards the expenses of local authorities in administering the household fuel orders. I want to ask whether that amount, which comes to £400,000, is going to drop, or, if not, whether it is to come out of this £250,000. If that is so, then it seems that the £250,000 is going to be never-ending, like the widow's cruse.

Captain ELLIOT: It was oil came out of the cruse, and is it in order to discuss it on a question as to coal?

Lieut-Commander KENWORTHY: I do not think the new Minister of Mines will deal with oil and I was not discussing that. Is this £250,000 only a gesture to be put in as a pious hope never to be realised. We ought to be told now and clearly what the cost is going to be as near as it can be calculated.

Mr. R. McLAREN: Those of us who are acquainted with the subject of the mines know that the £250,000 is only to cover certain things. We understand that the Minister of Mines is to take over certain matters which are now looked after by the Home Secretary and it is perfectly evident that money must be required for that purpose. I am not sure that the sum of £250,000 is too much for the various schemes. The question of the inspection of the mines and of the examiner's mining board have to be taken into account, and above all there is the question of research. I trust that the House will not listen to the request which has been made to ask the coal trade to defray the expenses of research, which I submit should be a matter for the Government. There is a Committee which has been inquiring for many years into the question of safeguards and also as to the question of explosives. I think the suggestion that there has been no research work done by the coal owners is very unfair. I can remember that on the great question of coal dust explosions, they conducted experiments and erected an establishment to demonstrate the composition of coal dust and shale dust with the object of preventing coal dust explosions. If any work of that kind is going to be done it should be done by the Government and not by private indi-
viduals. There is a penny on the ton in reference to the question of housing, which means a million pounds per year. Another penny per ton has been suggested for research. That means £1,000,000 per year.

Mr. SPEAKER: We are not discussing the levy to-night. We are discussing the sum that shall be payable by the Exchequer.

Mr. McLAREN: The Minister of Mines with £2,000 per year will not be overpaid for the work that he has to do. With regard to the £250,000, I am clearly of opinion that when you take over all the Departments that sum will not be too much. I only trust, seeing that we are going in for economy, that this Ministry will not, like some other Ministries, be increased very largely, and that the Government will keep within the margin and spend not more than £250,000.

Sir R. HORNE: I am disappointed that the speech which I made last night has made so little impression upon the mind of the hon. and gallant Gentleman opposite (Lieut.-Commander Kenworthy), because I then explained the very item regarding which he has questioned me to-night. It is perfectly true that the estimate of the Board of Trade, in connection with the Coal Department, included the sum of £500,000, of which £400,000 was for local committees. The result of the change which I announced some weeks ago with regard to the cessation of control over distribution has been that we shall be able to get rid, as far as next year's accounts are concerned, of that expense of £400,000. That is the reason we are able to do without the large sum of £550,000.

Lieut. - Commander KENWORTHY: Why not this year?

Sir R. HORNE: If we were asking for the expenses of these committees during this year, the present estimates would not cover them, because they are back-handed estimates. We only pay the expenses at the end of the year. Accordingly, we are always a year behind on the Estimates in regard to the expenses of the local committees. The fact is that, as far
as next year's Estimates are concerned, we are saving a sum of £400,000. We also expect to make other economies which I hope will cut down the cost of what will remain of coal control to £75,000. My hon. and gallant Friend has also referred to a sum of £252,000 for the Coal Mines Inspecting Branch of the Home Office. That covers only the actual work of inspection, excluding travelling expenses, the Statistical Department of the Home Office, and the bonuses which are now being paid to the various officers of the inspecting staff. The personnel which we take over from the Home Office under the Mines Bill will cost, according to present figures, £98,000 in all. If the items of the Home Office account were scrutinised it would be found that these sums represent what the Home Office have to pay at the present time for the staff which we taka over. We have arrived at the two figures of £98,000 and £75,000, and there are, as the hon. Member for North East Derbyshire (Mr. Holmes) said, other Departments of the Government which are to be taken over and which cost a certain amount of money. We have also got to anticipate duties in connection with the regulation of non-ferrous mines, which, according to the report recently presented to Parliament regarding that matter, require considerable help and supervision at the present time. The sum of £250,000, accordingly, is as near an estimate as I can make Of what the Department is going to cost. It is necessary to get some margin, because under the Bill new duties may be imposed on us by Order. I have done my best to arrive at a fair sum and to explain to hon. Members what the items consist of. There is no attempt to set up an inflated Department, and what I hope the future will reveal will be not an increase of establishment but a decrease. In the meantime, £250,000 is the sum which, as nearly as I can guess, will meet the needs of the Department, and from that point of view I support the Amendment which has been moved.

Mr. PEMBERTON BILLING: I think every Member ought to do his utmost to limit to the greatest extent the amount of money which any Department is allowed for any work it proposes to do. We have a repetition here now of what we had in earlier days during the War, when new departments were being set up every moment. A sub-lieutenant in the Admiralty succeeded in thinking of an
idea and thought it essential to set up a department to deal with it, and he knew quite well that the more he added to his typists the more important became his staff, and therefore the greater should be his remuneration, until eventually he had to have a sub-lieutenant to help him, and so he was made a lieutenant by rapid promotion. That is what is happening in the Government to-day. In the case of the Ministry of Mines, instead of an Under-Secretary looking after the Coal Mines Section of the Board of Trade, we have a brand new Minister in a framed-up job. I think in this matter I should have the support for the first time in my political life of some of the Labour Members. Their agitation for nationalisation, which is almost as pernicious as the alternative which the Government have introduced, and which has brought them no nearer to their Utopian ideas, has meant a framed-up position which is going to provide more jobs and more expense and generally a perpetuation of that pernicious bureaucratic control which we put up with on the excuse of winning the War, but which we as a nation are utterly fed up with to-day. Every Member who is not bound hand and foot to keep the present Government in power ought to raise his voice in opposition to any such expense, and it is only on the point of expense that you can possibly catch the Government out to-day. An hon. Gentleman said, "It is only £75,000; what is that?" Of course £75,000 is not much. It only takes a minute to say it, and there are sixty minutes in the hour and there are twenty-four hours in the day. That is what we have been listening to ever since the Armistice. There has hardly been a minute, especially after eleven o'clock at night, when the Government has not said something like, "Of course, that is only £200,000 or £300,000." But it is adding up, and to-day we were listening to the Chancellor of the Exchequer, who was trying to squeeze the money out of us, and ten minutes later we are told how it is to be spent. The finest Budgeting would be to stop this sort of legislation altogether, crush bureaucracy, and let an economic system establish itself in this country.

Mr. SPEAKER: The hon. Member's remarks do not seem to be relevant.

Proposed words, as amended, there inserted in the said Resolution.

Mr. HOLMES: I beg to move to leave out the words "two hundred and fifty" ["two hundred and fifty thousand pounds"], and to insert instead thereof the words "one hundred and seventy-five."
As the right hon. Gentleman thinks that £75,000 will be the future cost of the Coal Control Department which is transferred to the new Ministry, at any rate, the new charge on the Exchequer will not be £2,000, but £77,000. I suggested that the right hon. Gentleman was trying to ride off on the suggestion that the surplus from the pool would be handed over to the Exchequer, and I ventured to say last night that the Exchequer had not the right to touch that money. I was interrupted by the President of the Board of Trade that it was nonsense. I am going to show it is not nonsense. The Coal Mines Control Agreement Bill came before this House on 8th November, 1917, and Mr. Runciman made the point that that Bill was a taxation measure and imposed taxation upon the coal industry. Mr. Speaker dealt with that point very fully, and I desire to read part of the statement Mr. Speaker then made:
Then there is the question: Is there any charge upon the people? What does a charge upon the people mean? A charge upon the people, as I read it, means a charge which is made in the nature of a tax which is paid to the Inland Revenue Commissioners, which is paid by them to the Consolidated Fund, and is available for all purposes for which the State may require it, Army, Navy, Civil Service and what not. There is no such charge in this Bill or in the agreement. It is true that there is a levy, but in my opinion that is not a charge within the meaning of the Standing Order. The right hon. Gentleman (Mr. Runciman) suggested that this was an Amendment to the Finance Act, 1915–17, but there will be none of this money coming to the Consolidated Fund at all. There will be no moneys available for the State, and therefore there is no taxation. The 80 per cent. of profit—called Profits Duty—which is now raised by the State, will still be raised by the State, and will still be payable to the Inland Revenue. In addition to the 80 per cent. there will be 15 per cent., which will be levied amongst a section of the people, the coalowners of this country; but although that 15 per cent. will be paid to the Inland Revenue Commissioners, it will not be paid by them into the Consolidated Fund. It will remain under the charge of the Coal Controller. It stands very much in the nature of the compensation levy which was raised in the case of the licensed houses, and which was money levied upon the owners of the licensed houses for certain purposes which were indicated in the Bill. Indeed, it
may be said that it is very much in the same position as the Munitions Levy which was raised in 1915 upon the extra profits derived by the manufacturers of munitions. There was no charge upon the people there in the sense that it was a tax imposed. It was a levy, I think it was even called a levy in the Bill, imposed upon certain people, and it was used for certain purposes. It is true that in that case it was eventually passed on to the Exchequer, and possibly that is not so strong a case as this one where the money does not pass on to the Exchequer. No provision is made in this Bill for it ever passing on to the Exchequer. What eventually may happen to it I cannot say, but at all events in this Bill there is no such a proposal. I think that disposes of the first point which the right hon. Gentleman raised, that there is "a charge upon the people."—[OFFICIAL REPORT, 8th November., 1917; cols. 2401–2402, Vol. 98.]
A considerable number of questions were put on the point to Mr. Speaker. The hon. Member for Bilston (Brigadier-General Hickman) put one with regard to the levy in which, after pointing out the provisions of the levy, he said that after 40 per cent. of the surplus was allocated according to the schedule, the remainder went into the Exchequer. Then the following dialogue ensued:—
"Mr. SPEAKER: No, it does not.
General HICKMAN: I submit it does.
Mr. SPEAKER: That is where the hon. and gallant Member makes a mistake. There is no provision for the remainder going to the Exchequer. I thought I had made that quite clear.
General HICKMAN: I can only appeal to the right hon. Gentleman in charge of the Bill.
Mr. SPEAKER: It may be the intention of the Government or the hon. and gallant Gentleman, but there is no provision in this Bill for anything of the sort."
Mr. Speaker clearly ruled that this was not a taxing Bill, because the surplus, if any, would not get to the Exchequer. Later in the Debate the predecessor of the right hon. Gentleman (now Lord Ashfield) made this statement:
If, on the other hand, which is not unlikely, there is a surplus remaining, it will be for Parliament at the time the control comes to an end to determine what disposition is to be made of the surplus.— [OFFICIAL REPORT, 8th November, 1917; col. 2416; Vol. 98.]
The right hon. Gentleman was then questioned as to whether the Department would account to the Treasury. He replied:
I will answer that question when the time arises for dealing with it. The money
will be in the hands of the Inland Revenue Authority, and it is to be administered by the Coal Controller. I have said that if there is any remaining at the time the control comes to an end it will be for Parliament to settle what disposition is to be made Of it."—[OFFICIAL REPORT, 8th November, 1917; col. 2416; Vol. 98]
That disposes of the fact, at any rate, that under the coal control any surplus remaining in the pool shall go to the Exchequer. The Coal Mines (Emergency) Act simply carries on the same provisions. It state that the profits of the coalowners are to be paid into a pool, that they are to receive interest on their capital and one-tenth of the increased profits. There is also to be paid out of the pool the expenses, of the Coal Control Department, but nothing is said with regard to the final disposition of the pool. When I made this statement last night the right hon. Gentleman greeted it with the word "nonsense," but that is how the matter stands. There will probably be a surplus, and it is for the House to say how it should be disposed of. I think every hon. Member of the House will expect that the coal owners and the miners will have something to say before the whole of the pool is paid to the Exchequer.
12 M.
The right hon. Gentleman is asking the House to give him a Vote of £250,000 for the Ministry of Mines. I want the House to bear that in mind in connection with this White Paper which has been circulated. We are told that the only additional expense is to be £2,000 for the salary of the Minister of Mines. The right hon. Gentleman is asking for £250,000, so that we may assume that expenses to the extent of £248,000 are to be transferred from other Government Departments to the Ministry of Mines. I have been through the Estimates, and I have picked out the Departments likely to be transferred. There is the Home Office Department for the Inspection of Mines, and the present estimate is £80,734. Then there is the Department of the Home Office that deals with the Board for Mining Examination, for which £3,210 is put down. The Geological Survey of the Board of Education is responsible for £30,043. There is also the Commissioner of Woods and Forests who will transfer his sub—department which deals with land, and the total in this case is £33,000. There is the Coal Control Department, which the right hon. Gentleman estimates at £75,000, and if
you add to that £2,000 for the salary of the Minister of Mines the total is £190,087. Let us throw in £10,000 for contingencies and the whole total is £200,000. What is the £50,000 for? The right hon. Gentleman said that these proposals will only cost £2,000 more than the Exchequer is paying, but it is going to cost an extra £75,000 for the Coal Control Department, and in addition there is £50,000 unaccounted for. Is it unreasonable to suggest that the head office of the Ministry of Mines is going to employ experts who have never been in Government Departments before who will cost £50,000? That may be a perfectly right thing to do, and I do not quarrel with it. What I disagree with is the issuing of a misleading White Paper which says that this Ministry is only going to cost an extra £2,000, when the Coal Controller's Department has to be paid for by the State and a large number of new officials are going to be put on to the funds of the Exchequer. Never has a more misleading or untrue statement of expenses been presented to this House than this one which suggests that the new Ministry is only going to cost the country an additional £2,000 a year.

Mr. RENWICK: I beg to second the Amendment.
It is clear from this Resolution that we are dealing with the salaries and expenses of the Ministry of Mines. The Resolution reads:
That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of an annual salary not exceeding two thousand pounds to the Minister of Mines, and of such other salaries, remuneration, and expenses of the Ministry as may become payable under any Act of the present Session for establishing a Ministry of Mines.
It is clearly contemplated in the Resolution that we are going to have an increase of officials. The right hon. Gentleman says it is not intended to set up an inflated Department. It never is, but it comes about just the same. If the Coal Controller is worth his salt he is worth more than £2,000 a year, and I do not think that we shall get an efficient official at that salary. We shall probably have a proposal made later to increase his salary to £5,000 a year, and then he will want an Under-Secretary, and we shall find another great bureaucracy set up. I would like the right hon. Gentleman to say frankly what is the number
of officials contemplated. Why is this £75,000 wanted? Let us know what officials are going to be appointed under this Resolution. I do not wish to hamper the Minister, and I would rather help him, but I object, and I think the coal industry objects, to having another great bureaucracy set up. We were in hopes that we were going to get rid of control, but now it is going to be increased. We cannot forget that the people are asking, what has the Control done? It has given us dearer coal than we ever had before; the coal export trade has been destroyed; we have in all the ports of the country ships lying idle because they cannot get coal to enable them to go to sea. We have not to thank the Coal Control for anything. Unless we are going to get a better Ministry than we have had in the past, I strongly object to voting the amount asked for.

Sir R. HORNE: I appreciate the speech which my hon. Friend the Member for North-East Derbyshire (Mr. Holmes) has made to-night, in succession to the one which he addressed to the Committee last night upon the same point. He has used somewhat vehement language with reference to the White Paper issued to the House by way of explanation of the requirements of this Vote, and he has referred in particular to the statement that all that would be required, in addition to present expenditure, is a sum of £2,000 for the salary of the Minister of Mines. I hope he will not think me unfair if I remind him that, in moving the Second Reading of the Bill, I stated that £2,000 would be required for the salary of the Minister of Mines, and that there would necessarily be the small staff which every Minister requires by way of secretariat and so on; so that I hope my hon. Friend will not regard me as in any way exceeding the limits of the White Paper in saying that he must not stick too rigidly to the sum of £2,000. I explained, however, that it would be a very few thousand pounds altogether. I do not take it that that is his real point, but rather the larger one that in some way there has been concealed from the notice of a Committee of the House, and of the House to-night, the fact that there is a real additional expenditure, in his view, of some £75,000.

Mr. HOLMES: If I may interrupt the right hon. Gentleman for a moment, it
is not a question of concealed expenditure; it is his own figure for the future cost of the Coal Controller's Department, which he said would be £75,000 a year. My point is that that has been paid previously by the coal industry, and is now going to be paid by the Exchequer.

Sir R. HORNE: At any rate, I understood that my hon. Friend's point was that the White Paper concealed the fact that this £75,000 had previously been paid by the coal trade, while now it is to be paid by the Exchequer, and I do not think we really differ as to the point which he made. I regret very much that my hon. Friend should think that at any stage of his speech last night, to which I listened with great attention, I shouted across the House, or said sotto voce, the word "Nonsense." I am certainly not aware of having used any such expression, and if my hon. Friend thought I did I should very much regret it, and should like him to accept from me the assurance that I had no discourteous feeling whatever towards him, nor did I regard the argument he was adducing as meriting any such interpretation. I distinctly remember saying, at one stage of his argument, that I thought the statement he was making was inaccurate, and I repeated that in my reply. I did, indeed, think that he gave an inaccurate account of what had happened previously in connection with the expense of the Coal Control, and I interjected that remark at the time; but so far from thinking that his argument was one that I could treat with any sort of contempt, on the contrary, I repeatedly did my best, perhaps under considerable difficulty, to answer him.
I should like to say at once that I was completely in error in the view which I ventured to present to the Committee that, when a Government Department made sums of money with regard to the distribution of which nothing was said in any statutory enactment, that money thereby fell into the pocket of the Exchequer. I assumed that that was so. I had not the privilege of being a Member of the House at the time when Mr. Speaker gave the ruling to which my hon. Friend has referred, and I confess quite frankly to the House that I was in complete ignorance that that was in point of fact the method of procedure which
the House adopted and which was followed by the Exchequer. To that extent I make a complete apology to my hon. Friend and to the House for the inaccurate view which I endeavoured to present. After all, that is a technical point of view and really does not affect the question. My hon. Friend went through the items of expenditure which he had culled from various Estimates and arrived at a figure of something a little over £200,000 and asked what the extra £50,000 was for. In the course of his survey of these various items he omitted entirely to notice the Statistical Department of the Home Office, which will also come over to the Board of Trade and the Ministry of Mines, and he omitted further to observe that the Ministry of Mines has to take over certain duties with regard to nonferrous mines. They certainly deserve every consideration from the State at present and I hope the new Ministry will be able to do something on their behalf.

Captain W. BENN: What does the Statistical Department cost?

Sir R. HORNE: My impression is that it is something over £10,000. I am speaking from memory. Instead of the £80,000 which the hon. Member (Mr. Holmes) gave as the amount of the expenditure on the personnel to be taken over from the Home Office, the figure which I have is £98,000. In addition to that—and this is an item which, of course, he could not have found—there are a certain number of officers at present in the Coal Control Department whose salaries are borne on the Votes of other Departments. They are lent by other Departments. These salaries amount to £10,000. There is also a Department in the Board of Trade dealing with mineral resources and with statistics which costs roughly £10,000, so that I think my hon. Friend will recognise that I am well up to the figure which I have estimated will be required in order to meet the necessary expenses of this Department.

Mr. HOLMES: The right hon. Gentleman does not suggest that the whole of the Statistical Department of the Home Office is going to be transferred to him, because it deals with all statistics in the country.

Sir R. HORNE: I readily agree, but there is a large Statistical Department dealing with mines alone, and that is a very important body. It was referred to by the hon. Member below the gangway as one of the elements of expense which would require to be contemplated in connection with the Ministry of Mines. Accordingly, I do not think the House will think that we are in any way over-estimating the amount in putting it at £250,000. I should like to assure the hon. Member (Mr. Renwick) that these are sums which are already being paid to people who are at work in other Departments. We hold indeed that, by bringing all the various Departments together which are working in connection with the coal industry, we shall be able to get rid of a certain amount of overlapping, and it may be, in the end, save a good deal of expense which would have been incurred.

Mr. HOLMES: indicated dissent.

Sir R. HORNE: The hon. Member shakes his head as if that was an entirely despairing point of view; but, being younger in the political game than he is, I do not share his pessimism in these matters, and I hope something may yet be achieved on the lines of economy. I come to the point of my hon. Friend. I totally agree that automatically any surplus that there is as a result of the working of the coal trade will not fall into the Exchequer, but I have already declared, when the adjournment was moved to consider the question of the rise in price of coal, that the intention of the Government was that the Exchequer should receive any profits which might arise from the coal industry. At present the Exchequer is foregoing, by reason of the control, a very large sum which would be in course of realisation as the result of the Excess Profits Duty. Instead of the small profits which it may be anticipated will be realised from the operations of the coal trade, the Exchequer, if this trade had been uncontrolled, would have been taking certainly something well over £100,000,000 in the shape of Excess Profits Duty from the trade, and it is only proper that any profits which in the course of our operations may be realised in the coal trade should fall into the Exchequer. That is the assurance I gave, and accordingly, if there are profits, these will have to be dealt with in one way or another by the House. I agree
that the House is master of the situation. There is no sound foundation in reason for any assertion that either the coal owners or the coal miners should be entitled to these profits, and the view of the Government certainly is that they should naturally fall to the Exchequer. If they fall to the Exchequer, the Exchequer is just as much being relieved of the expense of operating the Coal Controller's Department as if the expense of the Coal Controller's Department was first taken out of the profits before they are handed over. Accordingly, I think the same point which I put last night is a perfectly sound one, though I admit that I was quite in error with regard to the technical situation which the hon. Member developed in the course of his speech.
I would say one further word, because the history of the matter was not put perfectly accurately by the hon. Member last night. During the operation of the Coal Mines Control Agreement (Confirmation) Act the Exchequer bore the whole cost of the Coal Control Department. From its initiation down to 1st April, 1919, the whole of the cost fell upon the Exchequer. It was only when the Coal Mines Emergency Act was passed that provision was made that sums which were expended by the Coal Control Department might be debited against the fund which came into his hands. That was done for the first time, and just to correct what the hon. Member said last night, not a single penny has ever yet been paid out of the coal trade for the purpose of maintaining the Coal Controller's Department. Every penny up to now has come from the Exchequer. (Interruption.) You may call it what you like. The hon. Member said last night it had been taken out of the coal trade in order to relieve the Exchequer. In point of fact, the Exchequer had had to bear the cost, and only if there are profits will the Exchequer ever be repaid. It is contingent upon there being profits.

Mr. HOLMES: There are!

Sir R. HORNE: There may be. At present no one is in a position to say what the profits will be. But supposing you had a big coal strike which took away all your profits, the result would be that the Exchequer would have to bear the cost of the Department. That brings me to this point. These costs
of the Coal Control Department must be borne upon the Vote of some Government Department. They are borne on the Vote of the Board of Trade. That must necessarily be so, and the cost must be borne by the Exchequer until such time as the Exchequer is recouped. If this White Paper is read fairly, there is a distinct reference to the Coal Controller's Department as one of the Departments to be taken over by the Ministry. In the knowledge which the hon. Member possesses and has given to the House it is obvious that, if the Coal Controller's Department is taken over, the Vote which stood in his name on the Board of Trade estimates must necessarily come over also. The White Paper states that the estimates of expense for the Coal Controller's Department will be increased only by this small sum, and that is true.

Mr. HOLMES: Temporarily.

Sir R. HORNE: It is only temporarily if, in point of fact, profits are realised by which it can be recouped, but the emergency Act dates back to 1st April, 1919, and not a single penny has yet been paid out and every penny has had to be paid by the Exchequer up to now, showing that you must have this Vote borne on the Estimates. What the White Paper represents is nothing more or less than this, that the estimates will be increased by only this small sum. There was no intention to mislead anybody. I think that my hon. Friend's somewhat violent description of it was scarcely deserved. Accordingly I ask the House to pass the Resolution with the Amendment which was made at the instance of my hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson).

Major-General Sir N. MOORE: If the right hon. Gentleman had made on the last occasion the speech which he has made to-night it would have saved discussion, because what was in the minds of many Members of the Committee was that a considerable amount of new expenditure would be entailed. We have to thank the hon. Member for North-East Derby (Mr. Holmes) for dissecting the expenditure and showing that this was purely a transferred expenditure from the other departments.

Mr. PALMER: Personally I am entirely—[HON. MEMBERS: "Divide!"]—unimpressed by the speech of the right hon. Gentleman. Whatever the transfer of money is, we come down to the sum of £2,000, which we are to vote for the creation of this new Ministry. That seems entirely unnecessary. We have had enough of these Controllers and new Ministers. I hope that my hon. Friends on this side of the House will join with some of us in going to a Division against this new expenditure. Since I have been in this House, I have heard more claims for new expenditure than I ever heard in the course of 35 years' experience of this House. I sat upstairs for many years and heard proposals for expenditure put forward, but at a time when we are crippled with taxation, when people outside this House are burdened almost beyond their capacity to bear, we have the Government asking for this expenditure to set up a new Ministry. People outside are weary of these new demands for taxation. They are so oppressed with taxation that I wonder whether the time will not come when they will rise in their wrath. I say that, not in mere rhetoric, but in all sincerity. Taxation to-day is so immense that it is the duty of the Government—which I endeavour at all points to support—wherever they can to mitigate it. This new Ministry, in my opinion, is entirely unnecessary. It is an outcome of the passion of the Government for a new bureaucracy. It is part of the desire of those who are in power to-day to fix upon the people burdens which they cannot possibly bear. I beg my hon. Friends who have listened to the speech of the Member for North East Derby (Mr. Holmes), who has shown that my right hon. Friend has not put the matter candidly before the House—[HON. MEMBERS: "Divide, divide!"]—I beg the House in all sincerity to pause before they commit the country to this new expenditure. My right hon. Friend opposite has been as fair as he can, and I am sure everyone will recognise the courtesy with which he has answered my hon. Friend. Last night, he frankly admits, he was mistaken in certain particulars. To-night he has come here and with all courtesy has put his case before the House, but he has not convinced the House. [HON. MEMBERS: "Divide, divide."] Although to-day the Government has a large majority the
time may come when under the pressure of public opinion that majority will filter away until nothing is left, and I say, and I demand from this House—

Mr. WATERSON: Hear, hear!

Mr. PALMER: I do not know why my Labour friends, who are supposed to be here in opposition, should be cynical in regard to the remarks I make. We independent men, who have taken no coupon and no ticket, are here to defend the taxpayer. This new proposal is a proposal which is putting on a burden of £2,000, and it will work out

at more than that. We are putting a burden of £2,000 on the back of the taxpayer. I see the Leader of the House here now, and even he is smiling at my sincerity. [HON. MEMBERS: "Divide!"]

Lord E. TALBOT (Joint Parliamentary Secretary to the Treasury): rose in his place and claimed to move "That the Question be now put."

Question put, "That the Question be now put."

The House divided: Ayes, 152; Noes, 30.

Division No. 189.]
AYES.
[12.28 a.m.


Addison, Rt. Hon. Dr. C.
Farquharson, Major A. C.
Neal, Arthur


Agg-Gardner, Sir James Tynte
Fildes, Henry
Newman, Colonel J. R. P.(Finchley)


Ainsworth, Captain Charles
FitzRoy, Captain Hon. E. A.
Newman, Sir R. H. S. D. L. (Exeter)


Allen, Lieut.-Colonel William James
Foreman, Henry
Norris, Colonel Sir Henry G.


Amery, Lieut.-Col. Leopold C. M. S.
Foxcroft, Captain Charles Talbot
Parker, James


Atkey, A. R.
Fremantle, Lieut.-Colonel Francis E.
Pickering, Lieut.- Colonel Emil W.


Bagley, Captain E. Ashton
Gange, E. Stanley
Pollock, Sir Ernest M.


Baird, Sir John Lawrence
Ganzoni, Captain Francis John C.
Pratt, John William


Balfour, George (Hampstead)
Gibbs, Colonel George Abraham
Pulley, Charles Thornton


Barker, Major Robert H.
Gilmour, Lieut.-Colonel John
Ramsden, G. T.


Barnston, Major Harry
Goff, Sir R. Park
Raper, A. Baldwin


Barton, Sir William (Oldham)
Gould, James C.
Raw, Lieutenant-Colonel N.


Betterton, Henry B.
Green, Albert (Derby)
Remer, J. R.


Bird, Sir A. (Wolverhampton, West)
Green, Joseph F. (Leicester, W.)
Renwick, George


Blades, Capt. Sir George Rowland
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Roberts, Rt. Hon. G. H. (Norwich)


Blane, T. A.
Gwynne, Rupert S.
Robinson, S. (Brecon and Radnor)


Boles, Lieut.-Colonel D. F.
Hailwood, Augustine
Robinson, Sir T. (Lancs., Stretford)


Borwick, Major G. O.
Hennessy, Major J. R. G.
Rogers, Sir Hallewell


Boscawen, Rt. Hon. Sir A Griffith-
Henry, Denis S. (Londonderry, S.)
Roundell, Colonel R. F.


Bowyer, Captain G. E. W.
Herbert, Dennis (Hertford, Watford)
Royden, Sir Thomas


Breese, Major Charles E.
Hickman, Brig.-General Thomas E.
Sanders, Colonel Sir Robert A.


Bridgeman, William Clive
Higham, Charles Frederick
Scott, A. M. (Glasgow, Bridgeton)


Broad, Thomas Tucker
Hinds, John
Shaw, William T. (Forfar)


Brown, Captain D. C.
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Buchanan, Lieut.-Colonel A. L. H.
Hope, James F. (Sheffield, Central)
Smith, Sir Allan M. (Croydon, South)


Buckley, Lieut.-Colonel A.
Horne, Sir R. S. (Glasgow, Hillhead)
Stanier, Captain Sir Beville


Burdon, Colonel Rowland
Inskip, Thomas Walker H.
Stanley, Lieut.-Colonel Hon. G. F.


Campion, Lieut.-Colonel W. R.
James, Lieut.-Colonel Hon. Cuthbert
Steel, Major S. Strang


Carr, W. Theodore
Jodrell, Neville Paul
Stephenson, Colonel H. K.


Casey, T. W.
Johnson, Sir Stanley
Stewart, Gershom


Cayzer, Major Herbert Robin
Jones, Henry Haydn (Merioneth)
Strauss, Edward Anthony


Chamberlain, N. (Birm., Ladywood)
Jones, J. T. (Carmarthen, Llanelly)
Sturrock, J. Leng


Clay, Lieut.-Colonel H. H. Spender
Law, Alfred J. (Rochdale)
Sugden, W. H.


Clough, Robert
Law, Rt. Hon. A. B. (Glasgow, C.)
Sutherland, Sir William


Coates, Major Sir Edward F.
Lewis, Rt. Hon. J. H. (Univ., Wales)
Talbot, G. A. (Hemel Hempstead)


Coats, Sir Stuart
Lloyd-Greame, Major Sir P.
Thomson, T. (Middlesbrough, West)


Cobb, Sir Cyril
Lort-Williams, J.
Waddington, R.


Colfox, Major Wm. Phillips
Lyle, C. E. Leonard
Ward-Jackson, Major C. L.


Coote, Colin Reith (Isle of Ely)
Mackinder, Sir H. J. (Camlachie)
Waring, Major Walter


Cope, Major Wm.
McLaren, Hon. H. D. (Leicester)
Wheler, Lieut.-Colonel C. H.


Courthope, Major George L.
McLaren, Robert (Lanark, Northern)
Whitla, Sir William


Craig, Colonel Sir J. (Down, Mid)
Matthews, David
Williams, Lt.-Com. C. (Tavistock)


Curzon, Commander Viscount
Montagu, Rt. Hon. E. S.
Wilson, Colonel Leslie O. (Reading)


Davies, Thomas (Cirencester)
Moore, Major-General Sir Newton J.
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Dawes, Commander
Moore-Brabazon, Lieut.-Col. J. T. C.
Wood, Sir J.(Stalybridge and Hyde)


Dennis, J. W. (Birmingham, Deritend)
Moreing, Captain Algernon H.
Wood, Major S. Hill- (High Peak)


Dewhurst, Lieut.-Commander Harry
Mount, William Arthur
Young, Sir Frederick W. (Swindon)


Doyle, N. Grattan
Murchison, C. K.
Younger, Sir George


Edgar, Clifford B.
Murray, C. D. (Edinburgh)



Elliot, Capt. Walter E. (Lanark)
Murray, John (Leeds, West)
TELLERS FOR THE AYES.—


Eyres-Monsell, Commander B. M.
Murray, Major William (Dumfries)
Lord E. Talbot and Mr. Dudley


Falcon, Captain Michael
Nall, Major Joseph
Ward.


NOES.


Barnes, Major H. (Newcastle, E.)
Entwistle, Major C. F.
Holmes, J. Stanley


Bell, James (Lancaster, Ormskirk)
Griffiths, T. (Monmouth, Pontypool)
Kenworthy, Lieut.-Commander J. M.


Benn, Captain Wedgwood (Leith)
Hall, F. (York, W. R., Normanton)
Lawson, John J.


Billing, Noel Pemberton-
Hayday, Arthur
Locker-Lampson, G. (Wood Green)


Bromfield, William
Hayward, Major Evan
Lunn, William


Davison, J. E. (Smethwick)
Hirst, G. H.
Raffan, Peter Wilson


Richardson, R. (Houghton-le-Spring)
Shaw, Thomas (Preston)
Waterson, A. E.


Roberts, Frederick O. (W. Bromwich)
Short, Alfred (Wednesbury)
Young, Robert (Lancaster, Newton)


Robertson, John
Smith, W. R. (Wellingborough)



Royce, William Stapleton
Swan, J. E.
TELLERS FOR THE NOES.—


Sexton, James
Thomas, Brig.-Gen. Sir O. (Anglesey)
Mr. Charles Palmer and Sir Richard Cooper.

Question put accordingly, "That the words 'two hundred and fifty' stand part of the said Resolution, as amended."

Question put, "That this House doth agree with the Committee in the said Resolution, as amended."

The House divided: Ayes, 139; Noes, 39.

Division No. 190.]
AYES.
[12.35 a.m.


Addison, Rt. Hon. Dr. C.
Farquharson, Major A. C.
Newman, Colonel J. R. P. (Finchley)


Agg-Gardner, Sir James Tynte
Fildes, Henry
Newman, Sir R. H. S. D. L. (Exeter)


Ainsworth, Captain Charles
FitzRoy, Captain Hon. E. A.
Norris, Colonel Sir Henry G.


Allen, Lieut.-Colonel William James
Foreman, Henry
Parker, James


Amery, Lieut.-Col. Leopold C. M. S.
Fremantle, Lieut.-Colonel Francis E.
Pickering, Lieut.-Colonel Emil W.


Atkey, A. R.
Gange, E. Stanley
Pollock, Sir Ernest M.


Bagley, Captain E. Ashton
Ganzoni, Captain Francis John C.
Pratt, John William


Baird, Sir John Lawrence
Gibbs, Colonel George Abraham
Pulley, Charles Thornton


Balfour, George (Hampstead)
Gilmour, Lieut.-Colonel John
Ramsden, G. T.


Barnston, Major Harry
Goff, Sir R. Park
Raper, A. Baldwin


Barton, Sir William (Oldham)
Green, Albert (Derby)
Raw, Lieutenant-Colonel N.


Betterton, Henry B.
Green, Joseph F. (Leicester, W.)
Roberts, Rt. Hon. G. H. (Norwich)


Blades, Capt. Sir George Rowland
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Robinson, S. (Brecon and Radnor)


Blane, T. A.
Gwynne, Rupert S.
Robinson, Sir T. (Lancs., Stretford)


Boles, Lieut.-Colonel D. F.
Hallwood, Augustine
Rogers, Sir Hallewell


Borwick, Major G. O.
Hennessy, Major J. R. G.
Roundell, Colonel R. F.


Boscawen, Rt. Hon. Sir A. Griffith-
Henry, Denis S. (Londonderry, S.)
Royden, Sir Thomas


Bowyer, Captain G. E. W.
Herbert, Dennis (Hertford, Watford)
Sanders, Colonel Sir Robert A.


Breese, Major Charles E.
Hickman, Brig.-General Thomas E.
Scott, A. M. (Glasgow, Bridgeton)


Bridgeman, William Clive
Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)
Shaw, William T. (Forfar)


Broad, Thomas Tucker
Hope, James F. (Sheffield, Central)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Brown, Captain D. C.
Horne, Sir R. S. (Glasgow, Hillhead)
Smith, Sir Allan M. (Croydon, South)


Buchanan, Lieut.-Colonel A. L. H.
Inskip, Thomas Walker H.
Stanier, Captain Sir Beville


Buckley, Lieut.-Colonel A.
James, Lieut.-Colonel Hon. Cuthbert
Stanley, Lieut.-Colonel Hon. G. F.


Burdon, Colonel Rowland
Jodrell, Neville Paul
Steel, Major S. Strang


Campion, Lieut.-Colonel W. R.
Johnson, Sir Stanley
Stephenson, Colonel H. K.


Carr, W. Theodore
Jones, J. T. (Carmarthen, Llanelly)
Stewart, Gershom


Casey, T. W.
Kidd, James
Strauss, Edward Anthony


Cayzer, Major Herbert Robin
Law, Alfred J. (Rochdale)
Sturrock, J. Leng


Chamberlain, N. (Birm., Ladywood)
Law, Rt. Hon. A. B. (Glasgow, C.)
Sutherland, Sir William


Clay, Lieut.-Colonel H. H. Spender
Lewis, Rt. Hon. J. H. (Univ., Wales)
Talbot, G. A. (Hemel Hempstead)


Clough, Robert
Lloyd-Greame, Major Sir P.
Terrell, Captain R. (Oxford, Henley)


Coates, Major Sir Edward F.
Lort-Williams, J.
Waddington, R.


Coats, Sir Stuart
Lyle, C. E. Leonard
Ward-Jackson, Major C. L.


Cobb, Sir Cyril
Mackinder, Sir H. J. (Camlachie)
Waring, Major Walter


Cope, Major Wm.
McLaren, Hon. H. D. (Bosworth)
Wheler, Lieut.-Colonel C. H.


Courthope, Major George L.
Matthews, David
Whitla, Sir William


Craig, Colonel Sir J. (Down, Mid)
Montagu, Rt. Hon. E. S.
Williams, Lt.-Com. C. (Tavistock)


Curzon, Commander Viscount
Moore, Major-General Sir Newton J.
Wilson, Colonel Leslie O. (Reading)


Davies, Thomas (Cirencester)
Moore-Brabazon, Lieut.-Col. J. T. C.
Wilson, Lt.-Col. Sir M. (Bethnal Gn.)


Dawes, Commander
Moreing, Captain Algernon H.
Wood, Major S. Hill- (High Peak)


Dennis, J. W. (Birmingham, Deritend)
Mount, William Arthur
Young, Sir Frederick W. (Swindon)


Dewhurst, Lieut.-Commander Harry
Murchison, C. K.
Younger, Sir George


Doyle, N. Grattan
Murray, C. D. (Edinburgh)



Edgar, Clifford B
Murray, John (Leeds, West)
TELLERS FOR THE AYES.—


Elliot, Capt. Walter E. (Lanark)
Murray, Major William (Dumfries)
Lord E. Talbot and Mr. Dudley


Eyres-Monsell, Commander B. M.
Nail, Major Joseph
Ward.


Falcon, Captain Michael
Neal, Arthur





NOES.


Barker, Major Robert H.
Hayday, Arthur
Robertson, John


Barnes, Major H. (Newcastle, E.)
Hayward, Major Evan
Royce, William Stapleton


Bell, James (Lancaster, Ormskirk)
Higham, Charles Frederick
Sexton, James


Benn, Captain Wedgwood (Leith)
Hinds, John
Shaw, Thomas (Preston)


Billing, Noel Pemberton-
Hirst, G. H.
Smith, W. R. (Wellingborough)


Colfox, Major Wm. Phillips
Jones, Henry Haydn (Merioneth)
Sugden, W. H.


Cooper, Sir Richard Ashmole
Kenworthy, Lieut.-Commander J. M.
Swan, J. E.


Coote, Colin Reith (Isle of Ely)
Lawson, John J.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Davison, J. E. (Smethwick)
Lunn, William
Thomson, T. (Middlesbrough, West)


Entwistle, Major C. F.
Palmer, Charles Frederick (Wrekin)
Waterson, A. E.


Foxcroft, Captain Charles Talbot
Raffan, Peter Wilson
Young, Robert (Lancaster, Newton)


Gould, James C.
Remer, J. R.



Griffiths, T. (Monmouth, Pontypool)
Richardson, R. (Houghton-le-Spring)
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Roberts, Frederick O. (W. Bromwich)
Mr. Holmes and Mr. Renwick.

The House divided: Ayes, 133; Noes, 35.

Division No. 191.]
AYES.
[12.44 a.m.


Addison, Rt. Hon. Dr. C.
Fildes, Henry
Newman, Sir R. H. S. D. L. (Exeter)


Agg-Gardner, Sir James Tynte
Foreman, Henry
Norris, Colonel Sir Henry G.


Ainsworth, Captain Charles
Fremantle, Lieut.-Colonel Francis E.
Parker, James


Allen, Lieut.-Colonel William James
Gange, E. Stanley
Pickering, Lieut.-Colonel Emil W.


Amery, Lieut.-Col. Leopold C. M. S.
Ganzoni, Captain Francis John C.
Pollock, Sir Ernest M.


Atkey, A. R.
Gibbs, Colonel George Abraham
Pratt, John William


Bagley, Captain E. Ashton
Gilmour, Lieut-Colonel John
Pulley, Charles Thornton


Baird, Sir John Lawrence
Goff, Sir R. Park
Ramsden, G. T.


Balfour, George (Hampstead)
Green, Albert (Derby)
Raper, A. Baldwin


Barnston, Major Harry
Green, Joseph F. (Leicester, W.)
Raw, Lieutenant-Colonel N.


Barton, Sir William (Oldham)
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Roberts, Rt. Hon. G. H. (Norwich)


Betterton, Henry B.
Gwynne, Rupert S.
Robinson, S. (Brecon and Radnor)


Blades, Capt. Sir George Rowland
Hallwood, Augustine
Robinson, Sir T.(Lancs., Stretford)


Boles, Lieut.-Colonel D. F.
Hennessy, Major J. R. G.
Rogers, Sir Hallewell


Borwick, Major G. O.
Henry, Denis S. (Londonderry, S.)
Roundell, Colonel R. F.


Boscawen, Rt. Hon. Sir A. Griffith-
Herbert, Dennis (Hertford, Watford)
Royden, Sir Thomas


Bowyer, Captain G. E. W.
Hickman, Brig.-General Thomas E.
Sanders, Colonel Sir Robert A.


Breese, Major Charles E.
Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)
Scott, A. M. (Glasgow, Bridgeton)


Bridgeman, William Clive
Hope, James F. (Sheffield, Central)
Shaw, William T. (Forfar)


Broad, Thomas Tucker
Horne, Sir R. S. (Glasgow, Hillhead)
Shortt, Rt. Hon. E. (N'castle-on-T.)


Brown, Captain D. C.
Inskip, Thomas Walker H.
Smith, Sir Allan M. (Croydon, South)


Buchanan, Lieut.-Colonel A. L. H.
James, Lieut.-Colonel Hon. Cuthbert
Stanier, Captain Sir Beville


Buckley, Lieut.-Colonel A.
Jodrell, Neville Paul
Stanley, Lieut.-Colonel Hon. G. F.


Campion, Lieut.-Colonel W. R.
Johnson, Sir Stanley
Steel, Major S. Strang


Carr, W. Theodore
Jones, J. T. (Carmarthen, Llanelly)
Stephenson, Colonel H. K.


Casey, T. W.
Kidd, James
Stewart, Gershom


Cayzer, Major Herbert Robin
Law, Alfred J. (Rochdale)
Strauss, Edward Anthony


Clay, Lieut.-Colonel H. H. Spender
Law, Rt. Hon. A. B. (Glasgow, C.)
Sturrock, J. Leng


Clough, Robert
Lewis, Rt. Hon. J. H. (Univ., Wales)
Sutherland, Sir William


Coates, Major Sir Edward F.
Lloyd-Greame, Major Sir P.
Talbot, G. A. (Hemel Hempstead)


Coats, Sir Stuart
Lort-Williams, J.
Terrell, Captain R. (Oxford, Henley)


Cobb, Sir Cyril
Lyle, C. E. Leonard
Waddington, R.


Cope, Major Wm.
Mackinder, Sir H. J. (Camlachie)
Ward-Jackson, Major C. L.


Courthope, Major George L.
McLaren, Hon. H. D. (Leicester)
Waring, Major Walter


Craig, Colonel Sir J. (Down, Mid)
Montagu, Rt. Hon. E. S.
Wheler, Lieut. Colonel C. H.


Curzon, Commander Viscount
Moore, Major-General Sir Newton J.
Whitla, Sir William


Davies, Thomas (Cirencester)
Moore-Brabazon, Lieut.-Col. J. T. C.
Williams, Lt.-Com. C. (Tavistock)


Dawes, Commander
Moreing, Captain Algernon H.
Wilson, Colonel Leslie O. (Reading)


Dennis, J. W. (Birmingham, Deritend)
Mount, William Arthur
Wilson, Lt.- Col. Sir M. (Bethnal Gn.)


Dewhurst, Lieut.-Commander Harry
Murchison, C. K.
Wood, Major S. Hill- (High Peak)


Doyle, N. Grattan
Murray, C. D. (Edinburgh)
Younger, Sir George


Edgar, Clifford B.
Murray, John (Leeds, West)



Elliot, Capt. Walter E. (Lanark)
Murray, Major William (Dumfries)
TELLERS FOR THE AYES.—


Eyres-Monsell, Commander B. M.
Nall, Major Joseph
Lord E. Talbot and Mr. Dudley Ward.


Falcon, Captain Michael
Neal, Arthur



Farquharson, Major A. C.
Newman, Colonel J. R. P. (Finchley)





NOES.


Barker, Major Robert H.
Higham, Charles Frederick
Royce, William Stapleton


Bell, James (Lancaster, Ormskirk)
Hinds, John
Sexton, James


Benn, Captain Wedgwood (Leith)
Hirst, G. H.
Shaw, Thomas (Preston)


Billing, Noel Pemberton-
Jones, Henry Haydn (Merioneth)
Smith, W. R. (Wellingborough)


Colfox, Major Wm. Phillips
Lawson, John J.
Sugden, W. H.


Cooper, Sir Richard Ashmole
Locker-Lampson, G. (Wood Green)
Swan, J. E.


Coote, Colin Reith (Isle of Ely)
Lunn, William
Thomson, T. (Middlesbrough, West)


Davidson, J. E. (Smethwick)
Palmer, Charles Frederick (Wrekin)
Waterson, A. E.


Entwistle, Major C. F.
Raffan, Peter Wilson
Young, Robert (Lancaster, Newton)


Gould, James C.
Remer, J. R.



Griffiths, T. (Monmouth, Pontypool)
Richardson, R. (Houghton-le-spring)
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Roberts, Frederick O. (W. Bromwich)
Mr. Holmes and Major Barnes.


Hayday, Arthur
Robertson, John
Mr. Holmes and Major Barnes.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the Clock upon Tuesday evening, Mr.
SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Ten Minutes before One o'clock a.m.